Socially Responsible Investment Gaining Ground In Europe
(3BL Media/Justmeans) â Wealthy European investors are beginning to see the long term value in sustainable funds. They are increasingly looking to Socially Responsible Investments (SRI's), a form of investment that is dynamic and a solution. SRI's combine financial objectives with social, ethical and environmental issues. Between June 2012 and June 2013, the U.K. saw ethical assets increase by 30 percent, gaining the second largest market in Europe, according to new analysis by evaluation agency, Vigeo. The appetite for green, social and ethical funds in Europe has grown considerably in spite of a tough economic climate, and has continued to show good growth over the course of 2015.
The Vigeo report confirms France as the largest European SRI retail market (35 percent of the total), characterised by a high proportion of fixed income funds. The U.K. remained in second place (15 percent), outstripping other countries. The number of funds, assets under management (AUM), has continued to grow, which confirms the capacity of SRI to resist to occasional crises and unsettled markets.
Interestingly, the data also shows that while some SRI funds are exiting the market, more are actually entering. In the year to the end of June 2013, six funds wound down, compared to 14 new funds. The figures suggest that SRI funds are becoming increasingly popular and are seen as attractive opportunities.
Even if still niche â SRI funds account for 1.7 percent of overall European retail AUM â this yearâs report pictures a more dynamic situation country by country. France confirms its leading role, both in terms of AUM (â¬ 46 bn), number of funds (263) and new openings (25); however ,key figures have also improved in other countries, such as Spain and Belgium. There, new funds have been launched with an increase in total SRI assets.
SRI continues to gain ground around the worldâethical funds are widely marketed in the U.S., Canada, Japan and Australia. Why? Is it because everyone is jumping on to the âethical bandwagonâ or are investors actually developing a conscience? The more likely answer is âenlightened self-interestâ. It is clear that growing awareness of environmental and social issues is creating business opportunities. Plus, recent events have shown how business ethics (or a lack of them) can impact corporations. Either way, it shows that there is hope for a more sustainable world for coming generations.
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