The European exchange traded fund (ETF) market has turned green in 2021 with 50% of the total flows year-to-date being directed to environment, social and governance funds, according to analysis from Trackinsight, the global ETF analysis platform.
Crunching the numbers this means this means $65.6 bn of the record breaking $130bn and 96 launched in the European ETF market.
Europe is the leading region for ESG ETF adoption, with 13% of total assets following an ESG strategy or theme.
This is in sharp contrast to North American-listed ESG ETFs which represent only 2% of regional ETF assets and received only 6% of the total flows to date.
On a global basis, ETFs which follow a sustainable investment approach or theme continue to hit new records with $325 bn of assets undermanagement and $100 bn of flows year to date.
This already outstrips the total flows into ESG ETFs in 2020 of $88.5 bn.
The number of ESG ETFs listed worldwide has grown exponentially in 2021 with 174 new ETFs being launched between January and August as issuers rush to capture this asset windfall.
“The impact of the climate crisis is obvious to all eyes that can see,” said Ailing Zhang, ESG ETF Analyst at Trackinsight. “The current wildfires in Turkey, Italy, and Greece have not only caught our attention, but are also a vivid illustration of the importance of change.
She added, “However, these latest numbers are cause for hope and indicate that we’re witnessing an historic shift in the mentality of European investors who are now putting sustainability at the heart of their investment decisions.”
Despite the tremendous growth of ESG ETFs investors’ concerns over greenwashing or misrepresentation of ESG credentials, persists.
Trackinsight has launched a dedicated ESG investing portal to provide investors with data, screening tools and ratings to enable them to fund the ESG ETF that matched their investment objectives.
It provides analysis of all ESG ETFs listed worldwide, including a mapping ESG ETFs against United Nations Sustainable Development Goals provided by UNCTAD (United Nations Conference on Trade and Development) and consensus based ESG ratings provided by Conser.
©Markets Media Europe 2021