Sustainable Investment Up 22% in Two Years

US investment in sustainable and responsible investments rose 22 percent in two years, according to research by the US SIF Foundation.

According to the 2012 Report on Sustainable and Responsible Investing Trends in the United States, there was $3.74 trillion of US investments held by individuals, institutions, investment companies or money managers that use SRI strategies at year-end 2011 (represented as “2012” – the year of the report – on the above chart). This is up 22 percent from around $3.06 trillion at year-end 2009 (“2010” on the above chart) and represents the fourth straight reporting period in which such investments increased, the report says. Sustainable and responsible investing accounted for 11.23 percent of all assets under professional management in the United States at year end 2011, the report says.

The increase reflects growing investor interest in considering environmental, community, other societal or corporate governance issues to refine how they select and manage their portfolios or raise their voices as shareholders, the US SIF Foundation says.  Additionally, the US SIF Foundation identified many investors that are beginning to develop their in-house capabilities to analyze ESG criteria; these developments speak to the potential for further growth in the US SRI market.

At year-end 2011, some $3.31 trillion in US-domiciled assets was held by 443 institutional investors, 272 money managers and 1,000-plus community investing institutions that select or analyze their portfolios using various ESG criteria. Some $1.54 trillion in US-domiciled assets were held by more than 200 institutional investors or money managers that filed or co-filed shareholder resolutions on ESG issues from 2010 through 2012, the report says.

According to a report released in July by the National Association of College and University Business Officers’ Commonfund Study of Endowments, just eight colleges and universities reported using sustainability investing in 2011, while 5 percent of the full sample, or 41 schools, used “environmental criteria” but didn’t provide specifics.

US schools’ endowments manage more than $400 billion in combined assets. While endowments pioneered ESG investing in the 1970s, the study, says three decades later endowments no longer lead institutional ESG investing.