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Laxman Pai, Opalesque Asia: The global value of environmental, social, and governance funds will surge to nearly $34tn by 2026 as investors look to profit from a transition to green energy, said a study.
ESG-focused institutional investment is seen soaring 84% to US$33.9 trillion in 2026, making up 21.5% of assets under management, said the report by PwC.
It represents a dramatic and continuing shift in the asset and wealth management (AWM) industry according to PwC's Asset and Wealth Management Revolution 2022 report, which captures the views of 250 institutional investors and asset managers worldwide, representing nearly half of global AUM.
"ESG-oriented AUM is set to grow at a much faster pace than the AWM market as a whole. Under PwC's base-case growth scenario, ESG-oriented AUM in the US (the largest AWM market) would more than double from US$4.5tn in 2021 to US$10.5tn in 2026; in Europe (already up 172% in 2021 alone) it would increase 53% to US$19.6tn," the report said.
Investors in other regions outside the USA and Europe are also growing their allocations. Asia-Pacific (APAC) has the fastest percentage growth in ESG AUM, with this expected to more than triple, reaching $3.3tn in 2026. ESG products in Africa and the Middle East are gaining market share, as well as in Latin America, where ESG products account for $25bn in AUM.
With the prospect of higher returns, investors surveyed are willing to pay for ESG performance - three-quarters, 78%...................... To view our full article Click here
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