Many institutional investors plan to stop buying non-ESG investment products by 2022, in a sign of a “paradigm shift” in the funds industry.
Nearly 80% of those surveyed said they planned to stop buying non-ESG products that year. Many expect a convergence between ESG and non-ESG products to have taken place by then, according to a study by PwC Luxembourg.
The organisation said the European funds industry was on the brink of a “paradigm shift” that would see ESG assets under management (AUM) account for over half the total of European mutual funds within five years, reaching between €5.5 trillion and €7.6 trillion by 2025.
This would mean ESG AUM would comprise between 41% and 57% of total mutual fund assets in Europe, up from 15.1% at the end of 2019.
Olivier Carré, financial services market leader at PwC Luxembourg, said: “Public awareness of ESG related risks, major regulatory change and institutional investors preferences are rapidly pushing ESG investing to the top of the asset management agenda.
“The combination of these trends has brought the European asset and wealth management industry to the brink of an imminent paradigm shift.”
PwC surveyed 200 asset managers, 300 institutional investors with European operations, and 800 European retail investors, with assets of total $14.3 trillion in assets under management.
The results are published in a report called ‘Growth Opportunity of a Century’.
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