Why ESG (environment, social, and governance) investing is a megatrend no asset manager can ignore.

Sustainable investing is a nebulous, if not often disingenuous category, yet its skyrocketing growth is no less staggering. In 2018, 290 ESG-oriented open-ended and exchange-traded funds were launched globally. According to a report by the Global Sustainable Investment Alliance, at least $30.7 trillion is now held in sustainable or green investments, up 34% from 2016. “These money flows account for one-third of the tracked assets under management,” according to Bloomberg.

Now, with funds concentrating in “sustainable” investing products, there may be no megatrend more essential to understand, both for asset managers looking to attract funds or maximize performance. According to a recent study by Morningstar, 72% of all U.S. investors are now “at least moderately interested in sustainable investments.” That number is even higher for younger investors and women. According to internal research by JPMorgan Private Bank, 86% of millennials — a generation set to inherit $30 trillion from their parents over the next 30 years — say that sustainability is an investment priority. And according to UBS, women — who will hold 32% of global wealth by 2020 — are set to invest more than $2.3 trillion for social causes by 2021.

Source: Why ESG (environment, social, and governance) investing is a megatrend no asset manager can ignore.

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