As published on fintech.global, Thursday 25 May, 2023.
Market analysis by digital identity security experts ID Crypt Global has found a 9% year-on-year rise in the number of ESG investment funds.
Despite this increase in funds, the total asset value of these funds has seen a 1.2% decrease over the past year.
The study, focusing on Q1 2023, analysed open-end funds and exchange-traded funds that claimed to prioritise sustainability, impact, or ESG factors. Findings indicated that there were approximately 7,030 ESG investment funds globally with an estimated asset value of $2.745m.
Europe is at the forefront in terms of the total number of ESG funds, housing 5,410, representing 77% of the global count. This figure marks a 9.1% increase from the previous year. Europe also stands as the leading region in terms of the total asset value of ESG investment funds, at an estimated $2.296bn, a 1% annual increase.
While Europe retains its dominance in the ESG investment funds space, Asia (excluding Japan) has shown the most robust growth in numbers, with a 39.6% increase compared to Q1 of last year. Australia and New Zealand also exhibited stronger fund growth compared to Europe, up by 31.4% annually. The United States followed suit with a 15% increase. Conversely, Japan was the only region to see a decline, with fund numbers falling by 72%.
Despite the modest 1.5% growth in the number of Canadian ESG investment funds, the total asset value saw an impressive 15.4% leap in the past year.
CEO and Founder of ID Crypt Global, Lauren Wilson-Smith, said, “It’s great to see that Europe is leading the charge with respect to the sheer volume and worth of ESG investment funds and while other global regions remain some way off the pace set within Europe, it’s also reassuring to see positive growth almost across the board.
“However, while the overall aim of ESG is a commendable one, many remain unconvinced that those businesses who undertake it are doing so for the right reasons.”