Climate action cited as number one sustainable investing priority

HIGHLIGHTS

• US SIF analysis, based on submissions to the SEC, records the US market size as $52.5 trillion, of which $6.5 trillion (12%) was specifically identified or marketed as sustainable or ESG investment, setting a new baseline for the size of the market.
• 73% of respondents expect the sustainable investment market to grow over the next one to two years.
• The integration of sustainability or ESG characteristics (81%) and the use of negative or exclusionary screening (75%) remain the most frequently reported sustainable investing strategies. Over 65% of respondents use three or more strategies across their investments.
• Partial or full fossil-fuel exclusions is now the most frequently reported negative screen (68%), surpassing tobacco exclusions (66%).
• Direct impact investing and community investing continues to be a bright spot with growing enthusiasm across multiple types of investors.
• Survey results indicate that there is a strong core group of investors who undertake multiple shareholder engagement activities.

In its 15^th edition, US SIF Foundation’s Report on US Sustainable Investing Trends identified climate action as the number one sustainable investing priority over the long- and short-term. The report documents $6.5 trillion in total US sustainable investment assets under management at the beginning of 2024. This represents 12 percent of the total US assets under professional management.

The 2024 US SIF Trends Report provides data on the US asset management firms and institutional asset owners using sustainable investment strategies and examines the environmental, social and corporate governance issues they consider in managing their portfolios. The report details the size of the US sustainable investment market, the Trends Survey findings, and emerging trends in the industry.

In addition to using advanced data analytics and AI tools, US SIF surveyed more than 250—doubling responses to the 2022 survey—and found that addressing climate change and the clean energy transition were top priorities for respondents. Additionally, 73% of respondents expect the sustainable investment market to grow over the next one to two years, while only 39% of respondents expect their own organizations to increase sustainable investing, indicating that this growth is anticipated to come from broader market participants.

First published in 1995, the Trends Report has tracked the evolution of the practice of sustainable investing from a niche approach centered on values to a broad field attuned to financial risks and opportunities. The 15^th edition of the Trends Report comes at another inflection point in that evolution. Now, against a backdrop of increased ESG-pushback and claims of greenwashing, the sustainable investing community has an opportunity in the way in which it addresses the systemic issues facing the global economy and our day-to-day lives – climate change, social inequity and responsible corporate governance.

This report is also evolving, analyzing data with more precision. The 2024 US SIF Trends Report builds on the changes made to the methodology in 2022 by taking another critical look at the availability of verifiable investor data and public reporting using advanced data collection and analysis techniques. Partnering with SDGlabs.ai, the 2024 Trends Report identified a baselines measure, which serve as a snapshot of the current market, enabling future comparisons and helping guide how stakeholders interpret the data. This methodology creates a foundation for consistent tracking moving forward.

Leadership, Sponsor and Member Comments

“Investor interest in capturing the opportunity of the climate transition remains a huge opportunity for the industry,” said Maria Lettini, CEO of US SIF. “Broader global market trends such as regulatory obligations, evolving client preferences, the transfer of inter-generational wealth and the growing frequency and severity of financially material physical and transition risks associated with climate change are certainly contributing to investors’ interest.“

“This methodology creates a foundation that we can have confidence in and continuously monitor going forward. It puts us on the front foot in identifying trends and teasing out actual behavior,” said Andreas Hoepner, Chair & Co-Founder at SDGlabs.ai. “Readers should view this as a baseline for future comparison, and we look forward to following up with more frequent and forward-looking research and continuous accountability monitoring.”

“Calvert’s time-tested investment philosophy is centered on deep proprietary research to determine the factors that affect operating companies’ financial performance,” said Anthony Eames, Managing Director, Responsible Investment Strategy at Calvert Research and Management. “The US SIF Trends Report does the important work of surveying industry participants, identifying key drivers of value—resulting in an invaluable resource to understand the trends impacting sustainable investors’ portfolios.”

“To remain competitive in an increasingly dynamic business environment, companies must effectively manage material sustainability risks and capitalize on emerging opportunities,” said Jared Fernandez, Senior ESG Analyst at Boston Trust Walden. “The 2024 Trends Report highlights the continued evolution of the sustainable investing industry, offering key insights and trends based on credible data from asset owners and asset managers. US SIF remains one of Boston Trust Walden’s most valued partners and the Trends Report one of the industry’s most invaluable resources.”

“This 2024 edition of the US Sustainable Investing Trends Report highlights the recognition that stewardship plays an intrinsic role in driving value creation opportunities,” said Dan Hanson, Managing Director, Head of Sustainable Equity Group at Neuberger Berman. “Many asset owners and asset managers continue to view shareholder engagement as a crucial investment imperative for driving for more resilient outcomes.”

For additional Trends report findings and information please visit ussif.org. To schedule an interview with Maria Lettini, CEO or to be added to the US SIF news release distribution list, please email ussif@lowecom.com. To register for US SIF’s public webinar on the findings of the report on January 9, 2025 at 11am ET, please click here.

2024 Trends Sponsors & Supporters

Clearbridge Investments

Calvert Research & Management

Boston Trust Walden

Raymond James Investment Management

Loring, Wolcott & Coolidge – The Sustainability Group

Governance & Accountability Institute Inc.

Trillium Asset Management

MacArthur Foundation

About US SIF and the US SIF Foundation

US SIF: The Sustainable Investment Forum is the preeminent voice advancing sustainable investing. Members, who represent $5 trillion in assets under management or advisement, support US SIF’s mission to rapidly shift investment practices toward sustainability, focusing on long-term investment, the generation of positive social and environmental impacts and supporting the shift toward a more resilient and equitable planet and society. https://www.ussif.org

US SIF is supported in its work by the US SIF Foundation, a 501(C)(3) organization that undertakes educational and research activities to advance the mission of US SIF, including offering trainings for advisors and other financial professionals on the Fundamentals of Sustainable and Impact Investment.

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