More than two-fifths of European professionally managed assets are subject to some kind of socially responsible investment (SRI) criteria.
The most popular SRI strategy, which applies to 41% of assets (€6.9 trillion), is exclusion, in which investors voluntarily exclude certain stocks or sectors from their investable universe. The most common exclusions relate to cluster munitions and anti-personnel landmines.
The study by the European Sustainable Investment Forum (Eurosif) also found that engagement is a growing strategy, with €3.3 trillion now subject to some kind of voting policy. The idea of engagement is that large investors use their voting rights to influence company management teams to be more responsible.
Impact investing, in which investors seek to achieve a specific environmental and social impact alongside a financial return, is a small but growing strategy, which has grown to be a €20 billion market, says the study. An example of impact investing is microfinance, which provides funding for unbanked entrepreneurs and small businesses.
“Discussions are shifting from whether SRI makes sense or not from a financial return standpoint, to how its tangible impacts can be measured,” says Eurosif executive director, Francois Passant.
First published in 2003, the latest Sustainable and responsible investment study is the sixth in the series. The study draws mainly from self-reported data from asset managers and institutional investors in 13 European countries.
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