The Rise of ESG Investing

How Investment Managers Can Seize a $50 Trillion AUM Opportunity

Report by Michael Tattersall  | May 16, 2022
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Table of Contents
Executive Summary
Key Points
Investment Managers Can’t Afford to Miss the ESG AUM Train
Definitions and Scope
Why Investment Managers Need Market-Leading ESG Products
What’s Hindering ESG Data Quality?
Poor-Quality ESG Data Creates Significant Risks for Investment Managers
How Investment Managers Can Capture the ESG AUM Growth Opportunity
Insider Intelligence Interviews
Read Next
Sources
Media Gallery
About This Report
Spiking client demand for ESG-focused investment products will drive AUM growth over the next three years. Yet a lack of quality or public ESG data threatens investment managers’ ability to offer accurate products and might see them run afoul of rising ESG regulatory standards.
Topics
Wealth & Asset Management
Worldwide
Table of Contents
Executive Summary
Key Points
Investment Managers Can’t Afford to Miss the ESG AUM Train
Definitions and Scope
Why Investment Managers Need Market-Leading ESG Products
What’s Hindering ESG Data Quality?
Poor-Quality ESG Data Creates Significant Risks for Investment Managers
How Investment Managers Can Capture the ESG AUM Growth Opportunity
Insider Intelligence Interviews
Read Next
Sources
Media Gallery

Executive Summary

Spiking client demand for environmental, social, and governance (ESG) products will drive assets under management (AUM) growth through 2025. Yet a lack of quality, public ESG data threatens investment managers’ ability to offer accurate products and might see them run afoul of rising ESG regulatory standards.

3 KEY QUESTIONS THIS REPORT WILL ANSWER

  1. Why do investment managers need a strong ESG offering?
  2. What’s at stake for investment managers that fail to overcome the ESG data challenge?
  3. How can investment managers harness technology to roll out personalized ESG products and meet rising regulatory standards?

WHAT’S IN THIS REPORT? We size up investment managers’ ESG AUM opportunity, examine the risks investment managers will face if they fail to accurately label their ESG funds, and lay out strategies they can use to delight clients and mollify regulators.

Environmental, Social, and Governance (ESG) Assets Under Management Worldwide, 2018-2025 (trillions)
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KEY STAT: Global investment managers will be competing for roughly $9 trillion in fresh ESG AUM between 2022 and 2025, as total AUM will surpass $50 trillion, per 2022 research from Bloomberg Intelligence.

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    Table of Contents

    1. Executive Summary
    2. Key Points
    3. Investment Managers Can’t Afford to Miss the ESG AUM Train
    4. Definitions and Scope
    1. Why Investment Managers Need Market-Leading ESG Products
    2. What’s Hindering ESG Data Quality?
    3. Poor-Quality ESG Data Creates Significant Risks for Investment Managers
    4. How Investment Managers Can Capture the ESG AUM Growth Opportunity
    1. Insider Intelligence Interviews
    2. Read Next
    3. Sources
    4. Media Gallery

    Charts in This Report

    Environmental, Social, and Governance (ESG) Assets Under Management Worldwide, 2018-2025 (trillions)Primary Challenge Investors Worldwide Face When Implementing ESG, June 2021 (% of respondents)
    Leading Reasons Financial Advisors in Canada Discuss ESG Investments with Clients, Sep 2021 (% of respondents)Leading Challenges Investors Worldwide Face When Implementing ESG Data, June 2021 (% of respondents)

    Interviewed for This Report

    Jon Hale
    Morningstar
    Global Head of Sustainability Research
    Interviewed March 14, 2022
    Ben Webster
    OWL Analytics
    CEO
    Interviewed March 17, 2022

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    authors

    Michael Tattersall

    Contributors

    Tyler Brown
    Senior Analyst
    Maria Elm
    Senior Analyst
    Daniel Ramirez
    Researcher, Financial Services