Sustainable funds received around $920 million (€793 million/CHF915.7 million) a month through May this year, according to financial research firm Morningstar. That’s almost twice the monthly average of around $530 million (€456.8 million/CHF527.5 million) last year.
American President Donald Trump’s antagonism towards environmental issues – he withdrew the US from the Paris climate accord – was one reason investors poured money into greener investments, said analysts.
Driving those moves were Ireland’s sovereign wealth fund divesting from fossil fuel, Norway’s sovereign wealth fund pulling its cash from tobacco and other moves.
But public funds aren’t the only players. Goldman Sachs and billionaire investor Paul Tudor Jones launched the “Just ETF” in June. It’s an index fund pegged to good business practices. It attracted around $250 million (€215.4 million/CHF249 million) in its first day of trading.
Challenges remain, however. A Morgan Stanley survey recently found that 84 percent of asset managers were considering basing their investments on environment, social and governance, or ESG, issues. But around 24 percent of the same respondents said the quality of data about ESG assets and “proof of market-rate financial performance” were significant concerns that were keeping some back from totally embracing the new approach to growing money.
Analysts speaking to Marketplace added that many different standards for ESG financial data exist, making it hard sometimes to figure out which is the best guidance that will foster the most sustainable investing.
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