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ESG Funds Surpass $1T in Wake of Covid-19 Pandemic

August 13, 2020

Spurred by the coronavirus crisis, assets under management in environmental, social and governance funds have topped $1 trillion, according to news reports.

The funds saw $71.1 billion in net inflows between April and June, a new record, CNBC writes, citing a study from Morningstar.

The company says the Covid-19 pandemic “highlighted the importance of building sustainable and resilient business models based on multi-stakeholder considerations,” according to the news network. 

ESG investments also received a boost from the jump in the number of ESG funds available, according to Morningstar, CNBC writes. The number of funds that apply ESG principles to their investment selection process in Europe rose from 2,584 at the end of March to 2,703 by the end of the second quarter, Morningstar says, according to the news network. 

Moreover, asset managers converted 40 traditional funds into ESG funds in the three months ending in June, with 30 of them getting new names, according to Morningstar, CNBC writes. 

The interest in ESG investing is also spurred on by central governments.

“Governments around the world have been stepping up their support for green projects in recent years, both through regulation and through fiscal spending,” analysts at UBS said in a research note published Tuesday, according to the news network. “This has intensified in the wake of the Covid-19 pandemic, as governments have committed to a green recovery.”

Meanwhile, Larry Fink, CEO of BlackRock, tells CNBC that the firm — the  largest money manager in the world, with over $7 trillion in assets — has been seeing a “surge of interest” from investors in green initiatives such as renewable energy. 

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By Alex Padalka
  • To read the CNBC article cited in this story, click here.
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Tags:  Investment strategies , Portfolio management , Marketing , BlackRock , Morningstar , UBS

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