Despite all the political noise and saber-rattling from some, ESG investing is still growing in popularity among investors. In a study commissioned by Capital Group, 89% of global investors are adopters, up from 84% in 2021. The number of non-adopters has declined to 1% in 2022 from 3% in 2021, as have those “on the sidelines,” to 10% from 13%.
The growing momentum is being driven by client demand and external pressures. Per the study, 42% of global investors said their approach is fueled by client expectations and reputational concerns, up from 37% in 2021.
A portfolio manager at a German private bank is quoted in the study as saying that “client demand is a big factor. Clients are increasingly asking for investments in renewable energy and investments targeting sustainable development goals. ESG is also big in the media and that plays a large influence.”
“The increasing sophistication of ESG investors can also be seen in attitudes to the UN Sustainable Development Goals (SDGs),” the survey’s executive summary said. “Almost a third say the ability to report on specific SDGs is one of the most important elements of fund sustainability reporting — nearly double last year’s percentage. And half say the ability to offer the full spectrum of SDG themes is important when selecting funds.”
To help investors better diversify, DWS has a suite of both fixed-income and equity environmental, social, and governance ETFs. On the fixed-income side, DWS offers the Xtrackers MSCI USA ESG Leaders Equity ETF (NYSE Arca: USSG), the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (Cboe: ESCR), the Xtrackers J.P. Morgan ESG USD High Yield Corporate Bond ETF (Cboe: ESHY), and the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (Cboe: ESCR).
In terms of equity funds, DWS also offers the Xtrackers S&P 500 ESG ETF (SNPE), the Xtrackers MSCI EAFE ESG Leaders Equity ETF (NYSE Arca: EASG), and the Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (NYSE Arca: EMSG).
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