Assets in sustainable funds increased by $5.5trn, a 50% rise, over the past two years, according to data from the Global Sustainable Investment Alliance and Morningstar.

GSIA’s Global Sustainable Investment Review using data from Morningstar, shows that total sustainable fund assets has reached $16.7tn. However, the report also acknowledges the challenges presented by weaker political will on climate change. The report said: “In the absence of government interventions to reshape the global economy onto a sustainable trajectory, capital will remain incentivised to exacerbate climate change rather than address it.”

James Alexander, chair of the GSIA and CEO of the UK Sustainable Investment and Finance Association, said, “This report demonstrates that the sustainable investment industry is on a rapid evolutionary trajectory, from a highly specialised field to market-wide consideration. The record growth of the green economy highlights how quickly the sustainable transition is progressing.”

Hortense Bioy, head of sustainable investing research at Morningstar, said, “The global growth of nearly 50% in the adoption of sustainable investment approaches over the past two years is striking, underscoring the continued mainstreaming of environmental and social considerations in investment processes. This trend is most pronounced in regions where regulation has enhanced transparency, notably Europe, Australia and Canada.

It’s also important to highlight the pivotal role of corporate engagement and stewardship in sustainable investing. These practices consistently emerge as the preferred tools for investors seeking to incorporate sustainability issues in their decisions and influence corporate behaviour.”

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