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Deloitte: ESG-mandated assets on pace to account for 50% of all professionally managed assets by 2025

Friday, February 21, 2020

Bailey McCann, Opalesque New York:

The US has often lagged behind other jurisdictions in terms of its appetite for ESG investments, but that may be changing. A new report from Deloitte suggests that the number of ESG-mandated assets in the United States could grow almost three times as fast as non-ESG-mandated assets, comprising half of all professionally managed investments by 2025. Deloitte expects that an estimated 200 new funds in the United States with an ESG investment mandate are likely to launch over the next three years, more than doubling the activity from the previous three years.

According to the report, the flurry of new ESG products could have the potential to start standardizing sustainable investing in the US. Large investors have been hesitant to adopt ESG mandates in part because measuring ESG is difficult and few industry wide standards exist. Deloitte expects that the uptick in ESG adoption will lead to a growth cycle for technology companies that can offer ESG ratings and other metrics services. In all, the report forecasts that ESG assets should continue to grow at a 16 percent compound annual growth rate (CAGR), totaling almost US$35 trillion by 2025. Flows into ESG funds are already on the rise. Assets allocated to sustainable funds reached US$8.9 billion through the first six months of 2019, compared to US$5.5 billion in all of 2018.

Investors have also calle......................

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