ESG funds will double by 2025

Sustainable investing is the number one growth opportunity for the asset management industry according to statistics from Dow Research, which predicts that the amount of ESG investing will double over the next three years.

By 2025, Dow Jones projects that these portfolios will represent 15% of all investments.

Based on a survey of 200 ‘financial leaders’, the research found that the opportunity to drive positive change was the most widely cited reason for this.

Fiduciary responsibilities and tighter regulations were the other reasons most frequently cited by respondents.

Two-thirds, or 66%, of respondents told Dow Jones that they see ESG investing as the primary driver of sustained long-term growth.

However, more than half – or 56% – warned that traditional methods of evaluating companies are inadequate for measuring sustainability.

Thus, 52% warned that the current quality of ESG data was not yet sufficient to base investment decisions.

“Our research clearly shows significant interest in sustainable investing in the years to come,” said Joe Cappitelli, managing director of Dow Jones Newswires.

“However, a significant percentage of finance professionals are faced with opaque and outdated data sources when seeking a comprehensive view of companies’ ESG practices. This is why reliable and timely ESG data and sentiment are imperative to help investment managers take advantage of this burgeoning growth opportunity.

Respondents highlighted ESG when discussing the importance of attracting future generations of investors.

According to the survey, 28% of sustainable investing inquiries come from Generation Z (anyone born between the late 1990s and early 2010s).

Conversely, only 16% of respondents are focusing on this demographic for growth.

Cappitelli added: “As we approach the largest wealth transfer in history, financial leaders, marketers and practitioners need to rethink their perception of this age group and better understand their motivations and behaviors in order to earn their trust. .”

Michael J. Birnbaum