ESG investing on track for more gains after bumper 2021

ESG investing on track for more gains after bumper 2021

It, for sure, has been a bumper year for environmental, social, and governance” (ESG) investing.

A record $649bn was poured into ESG-focused funds worldwide through November 30 last year, up from the $542bn and $285bn that flowed into these funds in 2020 and 2019, respectively, according to the latest Refinitiv Lipper data.

Global sustainable investments are now estimated to range between $35tn and $40tn, while ESG funds now account for 10% of worldwide fund assets.

Extreme weather becoming more frequent and events highlighting social justice issues contributed to ESG rising to the top of the agenda of investors, companies and policy makers.

The MSCI World ESG Leaders’ index gained 22% late December, compared with the MSCI World Index’s gain of 15%.

Investors also flexed their muscle to challenge companies’ ESG credentials, culminating in a landmark board challenge against oil major Exxon Mobil Corp.

Support for social and environmental proposals at the shareholder meetings of US companies rose to 32% in 2021 from 27% in 2020 and from 21% in 2017, according to the Sustainable Investments Institute.

Of the $6.1tn in ESG funds, 59% of the money is held in Europe, Middle East and Africa, according to Lipper, reflecting the region’s earlier embrace of the investing