The world came to an abrupt halt in 2020 as Covid-19 punctured every facet of life, disrupting the movement of people, goods and services and prompting wider questions around sustainability.The pandemic has exposed the reality that financial models haven’t adequately captured ESG risks and the related issues will drive future market trends.
The global health emergency initially set alarm bells ringing that ESG, which had seen its status rise steadily, could drop off the radar. In fact, the opposite has happened. Assets in sustainable funds hit a record high of US$1.25 trillion this year, as of the end of September, with Europe passing the $1 trillion milestone, according to Morningstar data. While inflows are strong, the distribution is uneven and ESG development, application and standards vary significantly from region to region, demonstrating the fragmented global landscape.
The continued straining of natural resources such as water, which sits at the heart of natural capital, demonstrates how vital it is to continue along a sustainable path – for, as the pandemic has shown, ESG is a bear market necessity.
Thank you for taking the time to open Funds Europe’s fourth ESG Special Report. Here, you will find an array of insights from asset owners and managers on various facets of ESG – from the climate crisis to diversity and inclusion and the importance of collaboration – and I hope it serves to deliver additionality to what is a collective movement.
Romil Patel, ESG Editor
© 2020 funds europe
