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Global Sustainable Investement Alliance

Europe Europe is the largest of the regional markets for sustainable investment covered in this study, both in absolute terms and relative to the size of the overall market. The commitment by European asset managers and owners to incorporate environmental, social and governance issues in their investment decisions is most evident in the amount of assets covered by one or more of the sustainable investment strategies. Beyond investment, European politicians and society at large have a strong history of supporting sustainable growth initiatives. Even while Europe is struggling under the burden of austerity, the commitment of the European Union to sustainable and inclusive growth remains9. Eurosif’s European SRI Study 201210, now in its fifth edition, shows that all sustainable and responsible investment strategies surveyed have outpaced the growth of the overall market, and four have grown by more than 35 percent per annum since 2009. In total, the amount of ESG-related investments in Europe has grown to US$ 8.76 trillion at the end of 2011, up from US$ 7.15 trillion at the end of 2009. However, beyond the European averages, national markets continue to vary considerably in terms of which strategies are used the most, the relative asset allocation, and whether most of the sustainable investment is retail or institutional. In short, there is no homogenous market for sustainable investment in Europe, which indeed reflects the cultural and historical diversity of Europe itself. The fastest growing individual strategy from 2009 to 2011 is norms-based screening, closely followed by negative/exclusionary screening, and best-in-class/positive screening. However, the growth is not uniform across the markets, and is typically characterized by a small number of large asset owners or managers adopting a certain strategy for all or a significant portion of their assets. Nevertheless, as experience shows, a few large pioneers can have strong influence on the market and lead to a proliferation of certain strategies. The largest strategy in absolute terms is negative/exclusionary screening, and the most common screen is for weapons banned by international conventions such as cluster munitions and anti-personnel mines. Almost half of Europe’s total assets under management have policies in place that specify the exclusion of companies involved in the manufacture of these weapons, although this is mandated by legislation in some jurisdictions11. The high growth numbers reported for negative/exclusionary screening strategies should however not overshadow the continuous and strong development of positive screening and ESG integration strategies in Europe. 9 For more on Europe’s growth strategy see: http://ec.europa.eu/europe2020/index_en.htm 10 The study is produced by Eurosif in collaboration with the national SIF members and other researchers, and is available for download at www.eurosif.org 11 The figure reported by Eurosif for exclusions is € 3.8 trillion, which is lower than the estimated € 6.7 trillion that excludes controversial weapons. This is be- cause Eurosif does not count investment exclusions that are mandated by law, as is the case in Belgium and France for companies involved in cluster munitions, anti-personnel mines and weapons with depleted uranium. Global Sustainable Investment Review 2012 20


Global Sustainable Investement Alliance
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