Just How Popular Is ESG Investing?

If you’ve been thinking about getting into socially responsible investing, also known as sustainable investing or impact investing, this refers to investing in those companies that prioritize environmental, social, and governance outcomes. Investments are therefore made with your unique consideration of human and environmental wellbeing in addition to economic returns.

The principles of ESG investing are not new, but there has been a significant expansion of ESG investing options in recent years. The pandemic spurred this forward tremendously, largely due to uncertainty and market disruption. Many investors in 2020 turn to ESG funds because of concerns about resiliency. In fact, the first few months of 2020 saw over $45 billion flowing into these funds.

It is predicted that in addition to the $30.7 trillion, currently sitting in sustainable investment funds around the world, this will increase to around $50 trillion in the next few decades. There are many different factors contributing to the surge in ESG investing, growing concern for environmental issues, the heightened engagement of groups who were not previously involved in traditional investing, such as women and young people, and more complex supply chains are just a couple of the factors driving changes in ESG investing.