Global ESG assets may reach $41 trillion in 2022 and $50 trillion by 2025, according to Bloomberg Intelligence.
According to BI, ESG assets surpassed $35 trillion in 2020, up from $30.6 trillion in 2018 and $22.8 trillion in 2016, to become a third of the total global assets under management. With 15% growth, ESG assets could exceed $41 trillion in 2022 and $50 trillion by 2025. Europe accounts for 50% of global ESG assets but the US has seen more than 40% growth in the past two years and is expected to exceed $20 trillion in 2022.
The $4 trillion ESG debt market could increase to $15 trillion by 2025, assuming it expands at third the pace of the past five years, while ESG ETFs surpassed $75 billion in the first half of the year.
Adeline Diab, Director of Research ESG at Bloomberg Intelligence said: “While ESG investing has gained traction by becoming mainstream and even mandatory in certain jurisdictions, it does not come without challenges. Scrutiny is going play an important role as regulators tackle the risk of greenwashing. The trend of growing ESG ETFs is inline with our bull-case scenario, which assumes a 35% growth, and we expect $1.3 trillion entering such ETFs globally by 2025. ESG ETF cumulative assets reached over $360 billion in 2021. While this represents almost 4% of global ETF assets, ESG has grabbed over 10% of the global ETF flows in 2021. Though Europe dominated ESG ETFs so far, the U.S. have led the wave of expansion.”