Sustainable & Responsible Investing: It's Now $1-in-$6 in the US Capital Markets!

Sustainable & Responsible Investing: It's Now $1-in-$6 in the US Capital Markets!

by Hank Boerner

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Hank Boerner is chairman of the Governance & Accountability Institute.

Friday, December 19, 2014 - 12:30pm

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For your conversations inside the company, and perhaps outside, the following key numbers should help you make the investing or business case for corporate responsibility:

  • At the end of 2013, $1 in every $6 of Assets Under [professional] Management ("AUM") in the USA was being [invested] using sustainable and responsible, and impact investing strategies by professional money managers and the owners they serve.
  • The magic number was $6.57 trillion AUM being managed by some strategies, approach, methodology, models, that are being characterized by a number of terms: sustainable investing; sustainable & responsible investing; socially responsible investing; impact investing; community investing; ethical investing; investing considering corporate ESG performance.
  • That is about 18 percent of the total AUM in the USA (an encouraging $36.8 trillion total after the recent recession) -- using all approaches to portfolio management including SRI.
  • Growth?  From 1995, the first time the trade association Forum for Sustainable & Responsible Investment (US SIF) conducted its survey of SRI AUM at year-end 1995 to the latest survey (year-end 2013), the growth of S&R investment was 929%. (That, you may point out, is a compound growth rate of 13.1% -- often outpacing the growth of the overall US capital markets AUM).  Including through the dark days of 2007-2009, when the growth of SRI was characterized as a "flight to safety," and away from Lehman Bros, etc.
  • The survey results for year-end 2011, the prior survey conducted by US SIF:  SRI Assets Under Management were $3.74 trillion -- that was about $1 in every $8 or $9 being managed.

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Hank Boerner is chairman of the Governance & Accountability Institute, which is the U.S. Data Partner for the Global Reporting Initiative (GRI). A senior strategist, Hank works with corporate clients to help them begin or enhance their sustainability journey -- and help them tell their story.