ESG investing - statistics & facts

Raising awareness to environmental, social, and governance (ESG) issues and targeting goals beyond maximizing profits and minimizing risks is a growing trend around the world, also within investing, which has generated large inflows of assets into ESG funds in recent years. Applying non-financial factors into the investment process is a response to global challenges such as climate change and inequalities, with the aim to have a positive impact on society - although environmental factors are the main focus for most ESG investments. It is more and more becoming the standard in the investment industry, especially in Europe, where most of the sustainable fund’s assets are concentrated. The most common approach to investing sustainably is through ESG integration - by explicitly and systematically factoring ESG issues into the investment decision. This approach is creating impact by forcing companies to report how they are dealing with important environmental, social, and governance topics.

What is driving the growth of ESG investments?

The growth of sustainable investments is driven by several factors: from regulators, impact on risk and return, from client demand, to influence corporate behavior, and keeping a good brand and reputation, just to name a few. Although some investors still believe that it might have a negative impact on risk and return, meaning they believe that the ESG portfolios will underperform compared to non-ESG portfolios, and they do not want to sacrifice investment performance. This unwillingness to accept lower return or increasing risk used to be the main barrier to wider adoption of ESG investing, but it is, however, becoming more acknowledged around the world that sustainable investments can perform even better, or at least as well as non-ESG portfolios, and can help mitigate risk. The main reason keeping investors from ESG investing today is more due to other factors, such as lack of knowledge, lack of comparability of ESG data across issuers, or regulatory or legal constraints.

How is ESG performance measured?

ESG impact is still hard to measure, despite around one third of invested assets being defined as sustainable, and despite the growing awareness to the topic. There are several score systems in use to measure the risks and effects of investments, such as the most widely used Sustainalytics, MSCI ESG ratings, and S&P Global (RobecoSAM), but there are also other third-party ratings or awards. These scores, or ratings, are the most common tools used by both institutional investors and fund selectors to help measuring the impact. They do, however, show significant divergence in many cases, even when being standardized and measuring the impact of one and the same company. There are also several different sustainability reporting frameworks to help enterprises communicate their impacts, although there are large differences between stock exchanges in which of these frameworks are being referenced. This divergence in ESG reporting prove that measuring ESG impact is hard, but not impossible, and many investors are calling for a more standardized reporting framework and regulation around the topic.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, May 31, 2023

Key insights

Largest region for sustainable assets
Europe
Value of ESG ETF assets worldwide
403bn USD
Leading ESG ETF in the United States by net assets
iShares MSCI USA ESG Select ETF
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Editor’s Picks Current statistics on this topic

Comparison of the effect of the S&P 500 ESG and S&P 500 indices between September 2020 and November 2022 (in standardized index points)

Stocks

Performance difference between the S&P 500 ESG and S&P 500 indexes 2018-2023

Return on sustainable funds compared to non-ESG funds in the United States from 1st quarter 2019 to 2nd quarter 2021

Investment Funds

Returns of sustainable funds vs. other funds in the U.S. 2019-2021

Leading ESG ETFs in the United States as of September 2023, by net assets and number of holdings (in million U.S. dollars)

Financial Instruments & Investments

Leading ESG ETFs in the U.S. 2023, by net assets and number of holdings

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