A report from Broadridge Financial Solutions says that ESG funds could reach $30 trillion by the end of this decade from $8 trillion this year.
According to the report, asset managers stand to gain up to $9 trillion of net new flows, with expanding opportunities through thematic strategies, climate transition and net zero solutions, and investments offering measurable sustainability impacts.
Net flows into ESG mutual funds and ETFs have risen this year to $577 billion in the nine months through September 2021, far surpassing the full-year total of $355 billion for 2020. Among actively managed strategies, ESG drove more than 100% of flows in local European funds and 62% of flows in cross-border European and International markets.
In response to SFDR, firms identified more than 5,700 funds as Article 8 ESG or Article 9 sustainable investment products with combined assets of $4.1 trillion (€3.6 trillion) as of September 2021. Thematic equity funds captured $303 billion in net inflows worldwide in the twelve months through September 2021, ten times greater than the amount in 2019. Dedicated ESG products represented 65% of that total.