Thursday, October 4, 2012

European SRI assets flourishing, study says, though mainly institutional

Sustainable and responsible investment is flourishing in Europe, according to a Eurosif study released this week.

“This is an incontrovertible truth whichever strategy one chooses to look at and whatever definition of SRI one ascribes to,” the study said. “During a timeframe when European assets under management increased by 3.8%, all of the sustainable and responsible strategies have outpaced this growth.”

For example, sustainability themed investments rose to 48,090 million euros in 2011, from 25,361 million in 2009, a 38% increase. Similarly, best in class/positive screen investments rose 46% to 283,206 million euros.

However, the impressive growth figures “mask some uncomfortable truths,” the study adds. “The European SRI market remains primarily institutional, and most of the growth in each of the individual strategies comes from a small number of institutional players investing in new mandates. The growth in each strategy is not from SRI assets outperforming the market, nor is it from an inflow of assets from the retail market, but a conversion of existing investments to one of the strategies.”

The proportion of SRI institutional assets has grown from 92% in 2009 to 94% in 2011.

Eurosif notes that this represents a challenge for the industry: Why are retail sales not keeping pace with institutional investors and professional asset managers who are pouring money into SRI? “Clearly, communication and clarification is needed to make retail investors see the same value in SRI that professional investors do.”

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