Infographic – Key trends in sustainable finance
By Katerina Mansour - 03 April 2023
Over the past few years, sustainability has become an issue at the forefront of the financial sector. Efforts to tackle the climate crisis, mitigate risks and respond to consumer demands have led to the birth of ESG investing, socially responsible investing (SRI), impact investing and more.
Financial players and individuals alike are becoming more involved in sustainable finance today, and predictions show that despite the general slowdown experienced in 2022, sustainable investments should regain their momentum in 2023.
The rise in demand for sustainable finance
Large traditional banks have faced significant backlash for directly funding polluting industries. Indeed, reports indicate that between 2015 and 2019, large banks provided $1.7 trillion in funding to 40 companies in the global plastics supply chain. Since the Paris agreement, large banks have funded fossil fuels to the tune of $3.8 trillion. With rising awareness of the banking sector’s role in climate change also comes rising demand for sustainable finance. Indeed, the European Commission has emphasized that sustainable finance has a key role to play in the world’s transition to net zero, namely by placing private money into carbon-neutral projects.
Millennials have had a significant influence on the growth of sustainable finance, as younger generations are increasingly demanding for more sustainability all around, including in their investments. Surveys have shown 95% of millennials are interested in investing sustainably. On a broader scale, 70% of people believe their investment decisions can impact climate change.
Sustainable investing has shown strong performance over the years. This arguably further contributes to its rising popularity worldwide. ESG investments often garner excess returns. Data has shown that in 2020, ESG investments outperformed traditional investments. Furthermore, 55% of impact investment opportunities have been shown to result in competitive, market-rate returns.
Recent facts and figures
In our latest infographic we take a look at recent figures illustrating the growth of sustainable finance.
- 66% of surveyed European institutional investors say they plan to stop investing in non ESG-funds in the future according to a PwC survey
- 73% of surveyed UK citizens believe banks should do more to invest in a greener future and 65% believe individual investors must ensure their money is being used for good
- According to Crédit Agricole CIB, global sustainable bond issues could reach €880m in 2023, increasing 30% from 2022
- Bloomberg estimates global ESG assets will exceed $53 trillion by 2025, representing more than a third of total assets under management
- European ESG assets are expected to reach $9 trillion by 2025