The Global Sustainable Investment Review 2022 pdf published by the Global Sustainable Investment Alliance (GSIA) provides a comprehensive overview of the global sustainable investment landscape. Covering major markets across Europe, the United States, Canada, Australia/New Zealand, and Asia, the report reveals that global sustainable investments reached $57 trillion in 2022, accounting for over 35% of all professionally managed assets.
With sustainable investment encompassing strategies that integrate environmental, social, and governance (ESG) factors into investment analysis and decisions, this rapid growth points to its increasing adoption by asset managers and asset owners. Key factors driving this trend include climate change risks, policy measures, investor demands, and better reporting standards around ESG issues.
The Global Sustainable Investment Review 2022 pdf offers detailed insights into regional sustainable investment trends, strategies applied, asset allocation, and motivations of investors. By tracking the sustainable investment universe, it supports efforts to direct capital towards sustainable development.
Europe sees record $22 trillion in sustainable investments
According to the Global Sustainable Investment Review 2022, Europe retained its global lead in sustainable investing with assets reaching $22 trillion in 2022, a growth of 48% since 2018. This accounts for over 60% of total professionally managed assets in the region.
The predominant strategy remains exclusionary screening, avoiding sectors or companies deemed unethical. However, there is increasing adoption of ESG integration, which systematically includes material ESG factors in financial analysis. Importantly, impact investing strategies grew almost fourfold over 2018-2022 to $734 billion.
Regulations such as the EU Sustainable Finance Disclosure Regulation (SFDR) and EU Taxonomy are driving growth by requiring entities to report on ESG risk management. Greater demand from institutional investors is also catalyzing the European sustainable investment ecosystem.
US sustains growth trajectory with $17.1 trillion in sustainable investments
The US sustainable investment market grew by 88% from 2018 levels to reach $17.1 trillion in 2022. With strong growth across all core strategies, this accounts for over 35% of total US assets under professional management.
ESG integration saw record adoption, reflecting rising interest from investment managers in incorporating material ESG factors. The biggest driver came from institutional asset owners like pension funds, now accounting for $13 trillion in sustainable investments. Significantly, US investors cited risk management as the top motivation for sustainable investing.
Government policy initiatives around climate risk disclosure and ESG issues are encouraging sustainable investment. Greater product availability and rising end-investor demand are also poised to unlock further growth.
Asia-Pacific gains momentum led by Australia and Japan
Sustainable investing in Asia-Pacific grew by 78% from 2018 to $11 trillion in 2022, representing over 36% of total assets managed professionally. Australia and Japan together account for 98% of the regional aggregate.
In Australia, exclusions and ESG integration are the preferred approaches, while norms-based screening and corporate engagement dominate in Japan. Importantly, over 50% of sustainable investments in the region are driven by investor demand.
While smaller markets like China and South Korea are accelerating, regulatory support can help mainstream sustainable investing. The Asia Region Funds Passport presents an opportunity for cross-border sustainable fund distribution across APAC economies.
Canada consolidates share to 71% of managed assets
With $3.3 trillion in sustainable investments, Canada retained the highest penetration globally at 71% of all managed assets. Policy and investor actions drove a 26% increase since 2018 in line with global growth rates.
Canadian asset managers and asset owners are well-aligned on motivations for sustainable investing, viewing them as risk management and return enhancement tools. Government policy such as mandatory climate risk reporting for large firms will likely spur growth given strong foundations.
The Global Sustainable Investment Review 2022 pdf highlights the tremendous growth in sustainable investing worldwide, now representing over 35% of professionally managed assets globally. With regulators and investors accelerating adoption, this growth trajectory is set to continue as risks around climate change and social issues garner increasing attention. As sustainable investment approaches become mainstream, they will play a vital role in directing capital towards the pressing sustainability challenges we face.