BofAML: Assets at European ESG Equity Funds Could Rise by €1 Trillion

https://dailyalts.com/wp-content/uploads/2019/11/sunflower-1127174_1920-european-esg-funds.jpg

A rising groundswell in favor of ESG investing indicates that one in three European equity funds could be ESG-focused by 2030

Regulatory compulsions and structural trends will boost assets under management at ESG equity funds in Europe, say BofAML analysts.

In their study titled “ESG Matters – Europe: Great for the world, good for returns,” the analysts foresee a surge of €1 trillion in assets at these funds by 2030.

Further, one in three European equity funds could be ESG-driven by then.

BofAML: Major trends driving investments into ESG equity in Europe

One of the secular trends in favor of ESG is the “persistent outperformance from higher-rated ESG stocks” versus the performance of their peers. Over the last decade, the advantage of ESG strategies is sharply evident in their superior returns.

“The top quintile of ESG-rated stocks on average has traded at a 20% premium to bottom quintile ESG-rated stocks over the past ten years,” observes BofAML in ESG Matters – Europe.

Political compulsions are another factor. The rising number of seats in the European Parliament won by ecopolitical parties shows the electorate is concerned about ESG.

Another emerging and secular trend is the marked preference for ESG stocks by a very important demographic: millennials.

These structural shifts indicated the moral change in the investor psyche, said Paulina Strzelinska, an author of the report. Therefore, the surge in the number of ESG equity funds in Europe.

Regulatory pressures

The report observes that regulations such as the 2017 EU Non-Financial Reporting Directive were also driving ESG forward. Accordingly, approximately 6,000 EU companies have published ESG data in annual reports.

Further, global climate priorities such as the UN Global Compact and Sustainable Development Goals (SDGs) are changing attitudes.

Companies must also comply with financial reporting as required by the Task Force on Climate-related Financial Disclosures.

[Related Story: 7IM: Dramatic rise in demand for sustainable and ESG strategies ]

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2020/07/equipment-3089883_640-evidation-article.jpg
Venture Capital: Health Data Analytics Platform Evidation Raises $45M
July 2, 2020     News, Venture Capital

Evidation Health’s Achievement platform collects everyday health data for use in innovative research and health platforms. Giving due emphasis to user privacy and controlled, permissioned health data, the platform gathers…

https://dailyalts.com/wp-content/uploads/2020/07/screenshot-www.weforum.org-2020.07.02-18_06_35.png
Artificial Intelligence: A UVC Robot Disinfects 4,000 Sq Ft Food Bank in 30 Minutes
July 2, 2020     Artificial Intelligence, News

MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL), Ava Robotics, and the Greater Boston Food Bank (GBFB) collaborated on a robotic solution to the problem of disinfecting a large area…

https://dailyalts.com/wp-content/uploads/2020/07/mockup-5288033_640.jpg
Alternative Investments: TrueMark Investments Launches A Structured Outcome ETF That Tracks the S&P 500 Index
July 2, 2020     Alternative Investments, News

TrueMark Investments has launched the TrueShares Structured Outcome (July) ETF (NYSEAMERICAN: JULZ) that offers investors exposure to the S&P 500 price index. The ETF is a “structured outcome” product, the…

https://dailyalts.com/wp-content/uploads/2020/07/india-1748445_1920.jpg
Digital Assets: Crypto Gathers Pace in India After Top Court Decision
July 2, 2020     Digital Assets, News

The Supreme Court of India recently struck down a circular issued by the Reserve Bank of India that barred banks from serving crypto businesses such as traders, exchanges, or others….