Strong Growth in Sustainable and Responsible Investment across Europe

14 November 2016

The 7th edition of the biennial Eurosif Market Study reveals double-digit growth for sustainable and responsible investment (SRI). The growth ranges from 30% for stewardship (Engagement & Voting) to 385% for Impact Investment. SRI is growing faster than the broad European investment market (25%) with retail investors returning to the market (up 549% since 2013).

At the launch event for its 2016 SRI Study in Brussels, Eurosif reveals the evolution of Sustainable and Responsible Investment strategies across the European member states. For the first time, the Study features endorsements from academia, scientific committees, investors and regulators; highlighting the extent to which SRI has become one of the major tools for financing the shift to a more sustainable economy.

Key Highlights:

  • Sustainability Themed investments more than double their growth

Sustainability Themed investments grew by 146%, with the most assets under management in France at €43 billion. An indicator that investors are increasingly looking at climate sensitive topics like energy efficiency and renewable energy.

  • Exclusions still dominate

Exclusions are still the most popular SRI approach with over €10 trillion of assets under management, showing a 48% increase. Leading countries are Switzerland, with €2.5 trillion and the UK and Germany with almost €1.8 trillion. This is in line with a wave of divestments that has been fueled by the climate change debate.

  • Norms-based screening remains a popular strategy

Norms-based screening has now become the second most significant SRI approach with over €5 trillion Assets under Management and a growth rate of 40%. France dominates with €2.6 trillion.

  • Impact Investing and Green Bonds continue their rapid growth

Impact Investing is the fastest growing SRI strategy up to 385% with €98 billion, from only €20 billion in 2013. The Netherlands leads with over €40 billion. This growth is supported by the significant rise in Green Bonds.

Policy Tailwinds

Across all the surveyed member states, there has been a positive response to the EU legislative agenda on enhanced transparency and corporate governance which aligns with long term sustainable investment. Examples include Spain and Italy where there have been policy developments which have driven a greater awareness of SRI across those markets. The pension fund disclosure requirements in Spain and the industry engagement with government in Italy on SRI have been important developments which have contributed to the growth in those countries.

Commenting on the survey, Flavia Micilotta, Executive Director of Eurosif, noted that: “The findings of this year’s Study are a clear reflection of the growing investor interest in SRI. In addition, the results support the heightened focus on sustainable and green finance that is increasingly shaping the agenda of EU regulators.

Will Oulton, President of Eurosif, added: “The Eurosif market study continues to be the key barometer of the development of the pan European SRI Market. The growth remains encouraging and reflects the increasing interest in sustainable investment in this dynamic market which should be noted by Europe’s capital market policy makers.