Europe is at the forefront of the ESG investment fund market. According to a recent report, Europe accounted for 44% of the $1.2 trillion ESG investment fund market in 2019. This is more than double the 20% of the market held by North America.
The growth of Europe’s ESG investment funds have been driven in part by the European Union’s focus on environmental, social, and governance (ESG) issues. The EU has adopted several new laws, regulations, and directives to promote responsible and sustainable investment, including the Sustainable Finance Disclosure Regulation (SFDR) and the Non-Financial Reporting Directive (NFRD).
The growth of ESG investment funds in Europe has also been driven by rising investor demand for sustainable investments. A recent survey by the European Sustainable Investment Forum found that more than half of investors in Europe have increased their ESG investments over the past year.
Several European countries have also introduced tax incentives to make ESG investments more attractive. For example, France recently introduced a tax credit for investments in certain ESG funds.
Europe’s leading position in the ESG investment fund market is likely to continue in the coming years. With the EU continuing to focus on sustainability issues and investors increasingly looking for sustainable investments, Europe looks set to remain the leader in the ESG investment fund market.