Despite all the political noise and saber-rattling from some, environmental, social, and governance investing is still growing in popularity among investors.
In a study commissioned by Capital Group, 89% of global investors are ESG adopters, up from 84% in 2021. The number of non-adopters has declined to 1% in 2022 from 3% in 2021, as have those “on the sidelines,” to 10% from 13%.
The growing momentum with ESG is being driven by client demand and external pressures. Per the study, 42% of global investors said their approach to ESG is fueled by client expectations and reputational concerns, up from 37% in 2021.
A portfolio manager at a German private bank is quoted in the study as saying that “client demand is a big factor. Clients are increasingly asking for investments in renewable energy and investments targeting sustainable development goals. ESG is also big in the media and that plays a large influence.”
“The increasing sophistication of ESG investors can also be seen in attitudes to the UN Sustainable Development Goals (SDGs),” the survey’s executive summary said. “Almost a third say the ability to report on specific SDGs is one of the most important elements of fund sustainability reporting — nearly double last year’s percentage. And half say the ability to offer the full spectrum of SDG themes is important when selecting funds.”
To help investors better diversify with ESG investments, DWS has a suite of both fixed-income and equity ESG ETFs. On the fixed-income side, DWS offers the Xtrackers MSCI USA ESG Leaders Equity ETF (USSG ), the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (ESCR ), the Xtrackers J.P. Morgan ESG USD High Yield Corporate Bond ETF (ESHY ), and the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (ESCR ).
In terms of ESG-focused equity funds, DWS also offers the Xtrackers S&P 500 ESG ETF (SNPE ), the Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG ), and the Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG ).
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