While the concept of ESG investments may be struggling to break into the mainstream within the U.S., but it may be turning a corner as demand for ESG fixed income products exceeded supply in Europe, according to new research by Cerulli Associates. The report revealed that inflows into ESG fixed-income products surpassed $11.4 billion the last two years, but a shortage of benchmark indexes that measure ESG-focused criteria makes it difficult for its inclusion in the asset class.
However, an influx of new ESG fixed-income products into the market over the next few years like ACSG and EMSG could help appease increased demand in the U.S.
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