Asset managers have been proactive in launching sustainability-focused products, with growth seen in climate change (+18%) and Paris-aligned (+11%) funds, according to data.
The research by Aviva plc’s global asset management business Aviva Investors’ 2024 multi-manager survey highlighted a rise in the number of sustainability-focused products launched over the past two years. Alongside climate and Paris-aligned funds, there was growth in positive impact (+8%) and UN SDG (+5%) products.
The survey found that 56% of managers had seen increased demand for sustainability-focused solutions over the last two years, with only 16% reporting a decrease. The trend was most pronounced in Europe ex-UK, where 84% of managers noted increased client interest, and in the UK, where 66% observed strong demand.
In terms of commitment to net zero targets, 74% of managers surveyed have signed up for the Net Zero Asset Managers Initiative, with an additional 6% expected to join within two years. About 12% of respondents believed that fund-level net zero targets would compromise long-term investment performance, indicating confidence in achieving sustainability goals without sacrificing returns.
The survey also revealed mixed opinions on regulation. It ranked among the top three opportunities and challenges for managers, suggesting ongoing uncertainty about the impact of industry guidelines. Additionally, there was a split over the term “ESG”, with 56% of managers finding it too broad and in need of refinement to promote more comprehensive adoption and best practices.
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Cameron Falconer, head of investment oversight and manager research at Aviva Investors, commented: “We are seeing a shift towards a more refined sustainability product suite within the industry. Further opportunities are certainly present in the marketplace, and the use of generative AI within Sustainability analysis appears to be an area that could grow over the next few years.”
While 27% of respondents confirmed that they use AI in their sustainability process, another 29% plan to introduce it within the next twelve months, added Falconer.
