European green and ethical investment doubles since 2005
Europe's ethical and environmental investment sector is worth €2.7 trillion and accounts for 17.5 per cent of assets under management across the continent, according to a new study from the European Sustainable Investment Forum (Eurosif).
The survey of asset managers and self-managed asset owners, found that investment in so-called Sustainable and Responsible Investment (SRI) assets, whereby portfolios are selected based in part on their environmental and ethical performance, more than doubled between 2005 and 2007.
Eurosif's executive director Matt Christensen predicted that investor interest in environmental and ethical risks would continue to expand in the wake of the recent financial crisis.
"In spite, and because of, the ongoing financial market turmoil, environmental, social and governance issues are becoming more relevant as important criteria for investors," he said. "SRI is growing dramatically and becoming more refined as an overall approach that meets the diverse interests of European investors."
The study concluded that the rapid expansion of the SRI sector was being driven primarily by investors growing awareness of climate change risk. But it added that increased interest in environmental, social and governance issues across business and media communities and increased demand for ethical and green investments from wealthy individuals were also playing a part.
The study found that the so-called "Broad SRI" category, where investors exclude certain companies that do not meet ethical or environmental criteria and integrate environmental and social risks into their financial analysis, was worth €2.2 trillion.
In contrast, the "Core SRI" category, which consists of thematic ethical or climate change funds and investors who actively seek out best-in-class environmental and ethical performers, is worth €512bn.
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