European SRI sector rises to €5trillion

The European SRI market has almost doubled in the past two years in spite of the financial crisis covering the period.

According to Eurosif’s 2010 SRI Study, sustainable investment in Europe now accounts for €5trillion (£4.5tn, $7tn) of assets under management, a growth of 87 per cent on the data collected in 2008.

The study says the financial crisis has in fact been a ‘wake-up call’ for investors and, combined with the Gulf of Mexico disaster and similar incidents, has meant the investment community is now more aware than ever of the need to integrate CSR into investment decisions.

Institutional investors continue to drive the SRI market, representing two thirds of all SRI assets under management, but retail investment is also on the increase in almost all of the 19 countries covered in the study.

Bonds are now the favoured asset among SRI investors, representing over half of all assets, while equities have dropped from half in 2008 to a third. Eurosif also predicts a rise in the importance of microfinance in coming years, with the sector already estimated to be worth E1tn.

Eurosif concluded: ‘The previous questions about the financial performance of SRI funds are now being replaced by queries about how to best measure the environmental, social and governance impacts in order to meet the rising expectations of investors.

‘These newer questions about how to best tackle and measure [such] factors in fund management will remain an evolving process with many unforeseen and interesting innovations in the coming years.’