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“We expect the RI market to become mainstream within asset management by 2015, reaching between 15%-20% of total global assets under management (USD 26.5 trillion) and a total revenue of approximately USD 53 billion,” says Responsible Investing: A Paradigm Shift,  published by Robeco and Booz & Co. last October. The firms said RI includes sustainable investing and socially responsible investing.

Ronald Florisson, a Robeco spokesman, told me recently the firm believes responsible investing still is poised to grow at the same rate, although the absolute numbers are no longer accurate. “We did not update the numbers, but we believe the direction is still the same. So, you could argue that these relative numbers are still a right indication. However we feel it could well be that this relative number will even be higher, also because a number of asset managers are working on transforming their 'traditional' investment processes into RI by integrating ESG factors into their investment processes and decision making.”

The financial crisis, he says, has put responsible investing more in the spotlight because investors particularly are focusing on good corporate governance practices. “Furthermore, a powerful group of asset managers, representing around $2 trillion in assets under management, are arguing that integrating environmental, social and governance (ESG) considerations into investment decisions is no longer just a luxury, but a legal responsibility,” he adds. Those managers make their case in a July report, supported by the United Nations Environment Programme, on fiduciary responsibility.

The movement toward responsible investing is happening faster on the institutional side, but will grow on the retail side as well. “Retail investors, in particular high-net-worth/affluent individuals, will move into this space. Their appetite will grow because more asset managers will more and more promote RI as important and adding value for them as investors,” Florisson says.

While the retail share of the market will significantly increase, he says, it will remain well below the institutional share. But demand for responsible investing mutual funds will come primarily from retail investors, he adds. “The investors are bullish on several RI themes, with clean energy, climate change and water leading the pack. Investors are also increasingly asking for multi-themed funds, as multi-theme funds are more diversified, show less volatility than pure plays and returns are more predictable, being better able to withstand market downturns. The popularity of the themes changes continuously. As certain themes gain popularity, they tend to become overvalued, leading to the emergence of new themes,” Florisson adds.