Europe Takes Lead as ESG Funds Surge 9%
According to a market analysis by digital identity security experts ID Crypt Global, the number of ESG investment funds has increased impressively by 9% year over year, securing Europe's position as a global leader in sustainable finance.
Despite the increase in funds, the total asset value of these funds has seen a slight 1.2% decrease over the past year.
ID Crypt Global's study, which focused on Q1 2023, analysed open-end funds and exchange-traded funds that prioritise sustainability, impact, or ESG factors. The findings revealed approximately 7,030 ESG investment funds globally, with an estimated asset value of $2.745m.
Europe leads the way in terms of the total number of ESG funds, with 5,410 funds representing 77% of the global count. This marks a 9.1% increase from the previous year. Europe also takes the lead in the total asset value of ESG investment funds, estimated at $2.296bn, reflecting a 1% annual increase.
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While Europe remains dominant in the ESG investment funds space, Asia (excluding Japan) has shown the most robust growth in numbers, with a 39.6% increase compared to Q1 of the previous year. Australia and New Zealand also exhibited stronger fund growth compared to Europe, up by 31.4% annually. The United States followed suit with a 15% increase. Japan, however, experienced a decline, with fund numbers falling by 72%.
Canadian ESG investment funds saw a modest 1.5% growth in numbers but an impressive 15.4% leap in total asset value over the past year.
Lauren Wilson-Smith, CEO and Founder of ID Crypt Global expressed enthusiasm over Europe's leadership in the volume and value of ESG investment funds. She also highlighted the positive growth across various global regions. However, Wilson-Smith acknowledged that scepticism remains regarding the motives behind businesses' adoption of ESG practices.
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Source: Fintech Global