US SIF report: Sustainable, responsible and impact investing (SRI) assets increased by 38% in the United States to $12.0 trillion, from $8.7 trillion in 2016.  Tweet This!

According to the US SIF Foundation’s 2018 biennial Report on US Sustainable, Responsible and Impact Investing Trends, sustainable, responsible and impact investing (SRI) assets account today for $12.0 trillion of the $46.6 trillion in total assets under professional management in the United States.

Asset managers are responsible for much of this growth, as – following client demand – they now take into account environmental, social or corporate governance (ESG) criteria across $11.6 trillion in assets (an increase of 44% from $8.1 trillion in 2016). The three key issues asset managers and their institutional investor clients mostly consider are climate change/carbon, tobacco and conflict risk.

The report identified $11.6 trillion in ESG integration assets under management at the beginning of 2018, held by 496 institutional investors, 365 money managers and 1,145 community investing financial institutions.

“Money managers and institutions are utilizing ESG criteria and shareholder engagement to address a plethora of issues including climate change, diversity, human rights, weapons and political spending,” said Lisa Woll, US SIF Foundation CEO.

The leading ESG criteria

Different ESG criteria are prominent among money managers (i.e. firms managing assets on behalf of others) and institutional asset owners (entities such as pension funds, foundations and educational endowments that own and invest assets).

• Asset managers: Climate change was the single most important ESG issue for money managers. From 2016 to 2018, the assets to which climate change related to more than doubled, to $3.0 trillion. Other ESG topics that money managers consider include tobacco, conflict risk, human rights, transparency/anti-corruption and civilian firearms.
• Asset owners: Conflict risk was the most important issue among institutional asset owners, increasing by 8% from 2016 to $3.0 trillion. Tobacco, carbon/climate change, board issues and executive pay followed in importance.

Other findings include:

• Both the number and assets under management of registered investment companies integrating ESG issues continued to increase. Assets in mutual funds reached $2.6 trillion (an increase of 34% compared to 2016) and the number of ETFs (Exchange Traded Funds) more than doubled, from 25 to 69.
• At the beginning of 2018, ESG assets under management in 780 alternative investment vehicles amounted to $588 billion, almost three times the assets identified in 2016.
• The community investing sector – which includes community development banks, credit unions, loan and venture funds – grew rapidly during the last decade, almost doubling in assets between 2014 and 2016 and growing by more than 50% from 2016 to 2018.

About US SIF

US SIF: The Forum for Sustainable and Responsible Investment promotes sustainable, responsible and impact investing across all asset classes, to rapidly shift investment practices toward sustainability. US SIF members include investment management and advisory firms, mutual fund companies, asset owners, research firms, financial planners and advisors, broker-dealers, community investing organisations and non-profit organisations. 

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

FBRH GRI Standards Certified and ISEP approved Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI-Standards Certified and ISEP approved Course you will be taking the first step in gaining the many benefits of sustainability reporting.

References:

This article is based on published information by US SIF. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.ussif.org/trends

The post SRI assets in the United States grow to $12.0 trillion, from $8.7 trillion in 2016 appeared first on SustainCase - Sustainability Magazine.

The Smith School of Enterprise and the Environment at the University of Oxford and Arabesque Asset Management explored, in a report, more than 200 academic studies and sources dealing with sustainability, with a focus on the connection between corporate social responsibility and profitability. According to the report, ‘responsibility and profitability are not incompatible, but in fact wholly complementary’.

Three key findings regarding the relationship between sustainability and the cost of capital, operational performance, and stock price performance

Overall, from the studies reviewed, three highly important findings emerged:

• ‘90% of the cost of capital studies show that sound Environmental, Social and Governance (ESG) standards lower the cost of capital.’

• ‘88% of the studies show that solid ESG practices result in better operational performance.’

• ‘80% of the studies show that stock price performance is positively influenced by good sustainability practices.’

The report’s conclusions

• Managers will only gain from incorporating sustainability into their strategic decisions, as will institutional investors and trustees if they ‘require the inclusion of sustainability parameters into the overall investment process’.

• ‘Investors should be active owners and exert their influence on the management of their invested companies to improve the management of sustainability parameters that are most relevant to operational and investment performance.’

• Asset management companies will only gain from incorporating sustainability in investment procedures.

• ‘The future of active ownership will most likely be one where multiple stakeholders (such as individual investors and consumers) are involved in setting the agenda for the active ownership strategy of institutional investors.’

• Research is needed to ‘identify which sustainability parameters are the most relevant for operational
  performance and investment returns’.

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.

References:

This article was compiled using a report by The Smith School of Enterprise and the Environment at the University of Oxford and Arabesque Asset Management. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the link below:

http://www.smithschool.ox.ac.uk/research/

The post Oxford University: Corporate sustainability and profitability are interrelated appeared first on SustainCase - Sustainability Magazine.