Donald Trump's election may spur more socially responsible investing, says Lisa Woll, CEO of US SIF, a Washington, D.C.-based nonprofit organization that promotes sustainable, responsible and impact (SRI) investing.
Retail and institutional investors may be prompted to pay even more attention to this growing field because curbing negative environmental influences may not be addressed on a govermental level, she says.
SRI investing already has taken a big leap in the past two years. One out of every five dollars that is invested under professional management in the United States is invested using SRI screening, US SIF Foundation says in its “Report on US Sustainable, Responsible and Impact Investing Trends 2016,” released Monday.
The amount of money invested under SRI standards has jumped 33 percent to $8.72 trillion in just two years, according to the report. SRI investing stood at $6.57 trillion two years ago, and was $639 billion when US SIF started the report in 1995.
The top two issues being considered within the SRI realm are the risks posed by conflicts within some countries and climate change, the report says.
“The trend of robust growth in sustainable and impact investing is continuing as investment managers apply environmental, social and governance (ESG) criteria across broader portions of their portfolios, often in response to client demand,” Woll says. “Asset managers, institutional investors, advisors and individuals are moving toward sustainable and impact investing to advance critical social, environmental and governance issues in addition to seeking long-term financial returns.”
SRI investing is no longer the realm of a small group of investors.
“A diverse group of investors is seeking to achieve positive impacts through such strategies as shareowner engagement or investing with an emphasis on addressing climate change, corporate governance, and human rights including the advancement of women,” says Woll.
The significant growth in ESG assets reflects demand from individual and institutional clients, growing market penetration of SRI products, the development of new products that incorporate ESG criteria, and the incorporation of ESG criteria by numerous large asset managers across wider portions of their holdings, US SIF says.
In compiling the report, US SIF considered such issues as climate change, human rights, weapons avoidance and corporate governance, among others. US SIF found 477 institutional investors, 300 money managers and 1,043 community investing financial institutions consider ESG issues when making investment decisions.