To help get you to the right website, please choose one of the options below

Skip Header

ESG investing trends: The rise of sustainability

The trend for more responsible investment is gaining momentum.

While there have always been investors keen to match their money with their morals, sustainable and ESG investment remained a somewhat niche interest up until a few years ago. This is no longer the case – advisers state that over half (56%) of their clients are now open to this approach . In fact, they predict that 30% of clients’ assets will be invested in a responsible way within five years – up from just 12% today.

The move towards a more sustainable approach was initially led by institutional investors, such as pension funds and investment foundations. As wider society has become much more conscious of environmental and social issues, retail investors have come on board too. The coronavirus pandemic may accelerate this trend further – 54% of advisers state they will recommend more ESG strategies to their clients as a result of the crisis1.

" Clients are more aware of the impact reduced human activity has had on the planet and are keen to support businesses that have an ESG focus.”"

Respondent to ‘How the advice sector is responding to the coronavirus crisis’

How big is the ESG and sustainable market?

The retail investment industry has reacted to this growing trend and there are now 167 sustainable and ESG funds available in the UK today. This represents a rise of over 100% since the beginning of 2016 – meaning investors now have genuine choice. In addition to ‘traditional’ ethical funds that focus on exclusions, there are a wide variety of portfolios that fully integrate ESG analysis into the investment process and funds which aim to make a measurable social and environmental impact. Passive options are also becoming more common and DFMs are looking to introduce ESG-focused model portfolios.

1 IFA DNA Report: Sustainable investing and the advice sector. April 2021.

" Lots of my clients say...it sounds like the right thing to do”"

Respondent to ‘Sustainable investing and the advice sector'

What is the demand for ESG investing?

Demand has grown significantly over the last five years resulting in huge growth in ESG assets under management – up 150% over the period. Interestingly, women appear to be at the vanguard of more mindful investing. Over half of advisers in our Financial Power of Women survey said that women tend to be more interested in investing responsibly than men. In a separate survey, advisers also identify younger clients as those driving demand1.

The climate emergency and other environmental issues mean it is highly likely that the focus on living life in a more sustainable way is here to stay. We therefore anticipate that the surge in interest in ESG investing will only grow further over the months and years ahead.

You can find more about the growth of sustainable investing in our Adviser Guide.

None

Client guide to sustainable investing

To aid your client discussions, we’ve produced a guide that explains all things ESG to your clients.

None

Sustainable investing glossary

Our glossary defines some of the more frequently-used terms in this field of investment.

None

Sustainable Investment Finder

Our tool is designed to make the process of selecting sustainable funds easier. Take a look at how it could help to identify potential fund solutions, whatever a client’s sustainable outlook may be.

Fund partner insights

Achieving net zero: The path to a carbon-neutral world

J.P. Morgan have published a framework to understand the investment implications of the energy transition, as the focus on reaching net zero continues to intensify.

ESG social factors: Accessing the "S" in ESG

Social factors are generally less well known compared to environmental and governance factors. J.P. Morgan explain why investors are now paying more attention to the “S” in ESG.

Credit and carbon – navigating complexity

There is an enormous focus from financial markets on decarbonisation. RLAM’s Matthew Franklin discusses the three key forces driving this.

The clean tech transition and implications for global commodities

J.P. Morgan’s Global Market Strategist explores how the new commodity supercycle could underpin a secular shift in the global economy and an equally seismic rotation in equity markets.

ESG Outlook 2022: Asset class views

Attractive environmental, social and governance opportunities are emerging across all asset classes. J.P. Morgan share their latest thoughts on how sustainability is shaping global markets.

The diesel dilemma

In 2020, transport accounted for almost 30% of total UK carbon dioxide emissions. Here RLAM ask, how will decarbonisation affect the UK’s rolling stock?

Considering ESG factors in cash and government bonds

RLAM discuss why there is no longer an excuse not to consider the effective integration of ESG factors in cash and government bond markets.

Why thematic investing must include climate considerations

Ben McEwen, Climate Change Investment Analyst at Sarasin & Partners, explains why thematic investing must include climate considerations.

Fidelity research finds link between ESG and dividend growth

Utilising Fidelity’s Sustainability Ratings, we recently analysed the relationship between sustainability and dividend payments to shareholders.

Assessing climate risk

Fidelity outline why a focus on sustainability can help in successfully identifying the long-term winners in Asia.

New to Fidelity Adviser Solutions?

Find out what we offer to help you build profitable and sustainable financial businesses.

Important Information - Please note that the value of investments and the income from them can go down as well as up so your client may get back less than they invest.