From the ETF investors surveyed in the U.S., Europe, and Greater China, 74 percent of respondents planned to increase their investment in of Environmental, Social, and Governance (ESG) ETF investments over the next year. Eleven percent of investors plan to decrease their allocation to ESG ETFs, and a further 14 percent of investors had decided to remain the same in their ESG ETF allocations.

From global investors surveyed, the vast majority of respondents had a positive opinion of statements linking strong ESG practices with higher financial returns. Over ** percent of global respondents believed it was possible to balance financial gains with a focus on sustainability, this number increased when asked to investors with a particular interest in sustainable investing.

In the five-year period from 2019 to 2024, the median returns generated by sustainable funds were comparable to that of traditional funds. In the first half of 2019 there was a difference of *** basis points (bps) with sustainable funds generating medium returns of **** percent and traditional funds generating *** percent. The first half of 2022 saw the largest discrepancy between the two fund types, with of difference of **** bps. As of the second half of 2024, both sustainable funds and traditional funds generated positive median returns, with *** percent and *** percent.

ESG ratings have emerged as the top factor influencing investment decisions globally in 2024. More than ** percent of institutional investors considered ESG ratings as a key driver, followed closely by ESG controversy with ** percent. On the other hand, ** percent of investors noted influence from the EU Green Bond Standard. Sustainable Development Goals and ESG ETF Investments Climate action, represented by Goal ** of the United Nations Sustainable Development Goals (SDG), has become the primary focus for ESG ETFs globally. As of 2024, assets worth **** billion U.S. dollars were linked to this goal, with *** out of *** ESG ETFs targeting climate action. This emphasis on environmental concerns has aligned with the broader overall trend of investors prioritizing companies with strong ESG practices and ratings. Regional Variations in Sustainable Fund Demand While the demand for sustainable funds has remained relatively stable or has been perceived to increase across some regions, differences have been notable. In the United States, ** percent of investors reported decreased demand for sustainable funds compared to non-sustainable options. However, Canada stands out, with over ** percent of investors having indicated stable or increasing demand. This regional variation underscores the importance of understanding local market dynamics when developing sustainable investment strategies.

The value of assets allocated to ETF funds, which included environmental, social, and governance (ESG) goals in their strategy, increased markedly from *** billion U.S. dollars in 2006 to *** billion U.S. dollars in 2021. As of November 2024, allocated assets reached *** billion U.S. dollars. Investment in sustainable funds, including ETFs, was primarily driven by developed markets mainly in Europe and the United States. What is environmental, social, and governance (ESG) investing? The ESG criteria is a set of principles used by investors to evaluate a company's performance when considering potential investments. The environmental aspect looked at the business's engagement in safeguarding the environment. From a social perspective, investors evaluated the business's impact on the local community and its relationships with stakeholders. Governance was reviewed by looking at internal controls, stakeholder rights, and executive pay. ESG factors have been an important component of investment decision-making. From a survey of *** participants the majority of investors expected ESG to be a part of a firm's core strategy. The impact of ESG As ESG relevance has increased over recent years, many firms aimed to achieve higher ESG scores, yet the difference between the ESG scores of the largest 25 companies by market cap remains vast. Companies such as Visa and Mastercard had a ranking of ** points or above. Commitment to ESG by high level executives had become a priority worldwide as approximately **** of the senior management in France, Japan, Singapore, and Germany noted a commitment to ESG. ESG's importance had also grown among investors as approximately ********* of investors noted a willingness to divest from a firm if they felt the company had taken insufficient action to focus on ESG-related goals.

The incorporation of environmental, social, and governance (ESG) considerations in investor mandates increased overall from 2022 to 2023. In 2022, ** percent of investors reported that ESG factors were integrated into ** percent or more of their mandates, a figure that rose to ** percent in 2023. The most notable changes were observed in the percentage of mandates with ESG integration between * and ** percent, which decreased by *** percentage points, and those with integration between ** and ** percent, which increased by **** percentage points.

The environmental part of environmental, social, and governance (ESG) investment seems to be the main focus among global investors that currently focus, or plan to focus on E, S, or G priorities, according to a survey conducted in 2020. Among the respondents who currently focus on ESG investments, almost ** percent stated that they focus on the environmental factor, while ** percent focused on the social aspect, and ** percent on the governance aspect. The environmental factor was also the one with the highest likely focus over the next three to five years. The Europe, Middle East and Africa (EMEA) region had the highest share of sustainably invested assets in 2020. Why is ESG investing important? ESG investing is an approach aimed at generating sustainable, long-term financial returns incorporating environmental, social, and governance elements into asset allocation and risk decisions. Despite its overlapping with sustainability concerns, another key driver of ESG investing is financial performance. In 2020, **** of ESG investors worldwide were motivated by the possibility to increase the return or mitigate the risk of their investments. Challenges for sustainable investments Despite the expected positive impact of the coronavirus pandemic in raising ESG awareness among investors, there are still many challenges that sustainable investors will have to overcome in the future. Among them, impact washing was cited by the large majority of impact investors worldwide as the most relevant threat for the industry. Impact washing practices rise from the lack of clarity about how impact investments are managed, and from the inability to measure impact results. Therefore, it is often possible for companies to make untruthful impact claims, without truly pursuing any social nor environmental impact. Clearly, impact washing poses a considerable threat to a fair and efficient allocation of funds in the impact industry.

In 2023, a ***** share of investors in Asia and Europe did not believe that ESG funds would yield higher returns compared to other funds, which was a significant barrier to investing in sustainable funds. Another major challenge was that investors were unclear about what ESG funds are invested in and whether they genuinely provide a more sustainable option.

More than **** of corporate issuers and investors in the Americas and Europe saw neither overperformance nor underperformance of their ESG investments compared to their non-ESG investments within the last 24 months, as of March 2021. However, in both regions, more issuers and investors saw an overall outperformance rather than an underperformance.

As of September 2024, there were a total of 5,498 sustainable funds in Europe, making it emerge as a leader when compared to the other regions in the world. In fact, European sustainability funds accounted for more than 70 percent of the total. On the other end of the spectrum, Australia & New Zealand had 267 sustainable ETFs.

As of October 6, 2025, the S&P 500 and the S&P 500 ESG index exhibited similar performance; both indexes were weighted to similar industries, as the S&P 500 followed the leading 500 companies in the United States. Throughout 2025, the S&P 500 ESG index steadily outperformed the S&P 500 by ***** points on average. During the coronavirus pandemic, the technology sector was one of the best-performing sectors in the market. The major differences between the two indexes were that the S&P 500 ESG index was skewed towards firms with higher environmental, social, and governance (ESG) scores and had a higher concentration of technology securities than the S&P 500 index. What is a market capitalization index? Both the S&P 500 and the S&P 500 ESG are market capitalization indexes, meaning the individual components (such as stocks and other securities) weighted to the indexes influence the overall value. Market trends such as inflation, interest rates, and international issues like the coronavirus pandemic and the popularity of ESG among professional investors affect the performance of stocks. When weighted components rise in value, this causes an increase in the overall value of the index they are weighted too. What trends are driving index performance? Recent economic and social trends have led to higher levels of ESG integration and maintenance among firms worldwide and higher prioritization from investors to include ESG-focused firms in their investment choices. From a global survey group, over ********* of the respondents were willing to prioritize ESG benefits over a higher return on their investment. These trends influenced the performance of securities on the market, leading to an increased value of individual weighted stocks, resulting in an overall increase in the index value.

Banks *********** in having implemented environmental, social and governance (ESG) policies worldwide in 2020, ******** by non-financial companies and asset managers. Among the banks surveyed, over ** percent had a firm-wide policy on responsible or ESG investments. Family offices accounted for the lowest share of ESG policies, which was ** percent, and the highest share of respondents who stated no intention to implement one. Many investors believe the coronavirus pandemic will increase the awareness and importance of considering ESG issues. What is ESG policy? ESG policy refers to Environmental, Social, and Governance policy, which is a set of standards for sustainable and conscious investing. The most common focus of the three components is the ‘E’ - environmental. Overall, ESG investing is becoming more popular., There are many reasons to consider ESG factors - for example, society or clients expect it, or regulators require it. The main reason, however, why many investors chose to implement ESG policies, is because they believe it can improve investment returns and reduce risk. What are the obstacles with implementing ESG policy? While many investors chose to implement ESG factors into their investments as they believe it is beneficial with regards to risk and return, a large share of investors reject this notion, thinking it sometimes or always involves accepting lower returns or higher risks. Especially in the United States (compared to Canada, Europe and Asia), a relatively high share of investors expected that ESG portfolios will underperform. A further barrier to implementing ESG policy might be that a higher share of investors in 2020 had the impression there were not enough ESG offerings in some asset classes, especially in hedge funds.

In 2023, a high share of investors in Germany expected Environmental, Social, and Governance (ESG) funds to outperform non-ESG funds of the same risk level. The share of respondents in Germany anticipating the outperformance of ESG funds stood at nearly ** percent. In contrast, the United Kingdom had the ****** share among selected European countries, with only a ******* of respondents expecting ESG fund outperformance.

Goal 13 of the United Nations Sustainable Development Goals (SDG) - climate action - was the most targeted by global ESG ETFs in 2025. Among the 600 ESG ETFs that targeted the SDGs, ****targeted the 13th goal. Affordable and clean energy (goal number 7) was the second most targeted goal, with ***ETFs as of May 2025. Institutional investors primarily review company reports for underlying holdings as a method for ESG ETF evaluation, so fund managers must focus on companies with strong ESG practices and transparent sustainability reporting. What is Sustainable investing? Sustainable investing is becoming increasingly important in the financial world. In its broadest form, sustainable investing is where investment decisions incorporate how a company manages risks associated with environmental, social, and governance (ESG) issues. Many investors like the idea of making money while simultaneously catering to the growing demand for greater emphasis on the ESG scores of companies. ESG scores are the simplest way to incorporate environmental, social, and governance concerns into investment strategies because they provide standardized values that investors can use to compare companies' performance on ESG concerns. Why have ESG ETFs seen a rise in popularity? Investors are becoming more interested in ESG ETFs lately. Between 2014 and 2024, the number of ESG ETFs worldwide experienced a significant increase of nearly tenfold. This surge in interest and investment can be partially attributed to consumers' increased awareness, who prefer to support businesses that align with their values and make positive contributions to society and the environment. Moreover, regulators and policymakers are increasingly interested in ESG as they seek assistance from the corporate sector in resolving issues such as climate change, workplace diversity, and human rights.

In 2018, investments in black assets were more popular among sovereign investors, as green assets at this time had a total investment value of under *********** U.S. dollars. From 2020 to 2021, the level of investment in black assets roughly halved, while the value of green asset investment almost tripled. This trend continued as the value of green asset investment is more than double the value of black asset investment in 2024. A surge in green investment has been evident, as the assets under management of sustainable funds worldwide more than doubled in just five years. How do green investments perform in comparison to peers? When comparing median returns of sustainable funds to non-ESG funds between 2019 and 2023, sustainable funds outperformed traditional funds. During this period, sustainable funds achieved a total median return of approximately ** percent, compared to ** percent for traditional funds. This strong performance highlights the growing appeal of sustainable investing as both a financially rewarding and responsible choice. What are ESG exchange-traded funds (ETFs)? ESG ETFs are investment funds that track indices composed of companies with strong environmental, social and governance attributes while maintaining risk and return profiles comparable to their parent index. As demand for responsible investing grows, ESG ETFs continue to gain popularity among investors seeking financial returns while making a positive societal impact. The largest ESG ETF by net assets worldwide is BlackRock’s iShares ESG Aware MSCI USA ETF, with ***** billion U.S. dollars in assets, followed by JPMorgan ETFs (Ireland) ICAV - US Research Enhanced Index Equity (ESG) UCITS ETF, with ***** billion U.S. dollars.

From 2018 to 2021, the level of assets under management (AUM) of sustainable funds worldwide steadily increased, reaching a peak in December 2021. June 2022 saw a decrease in AUM down to roughly *** trillion U.S. dollars. As of December 2024, the level of AUM increased once again to **** trillion U.S. dollars.

This statistic depicts the results of a survey conducted in Italy as of September 2017. The survey’s aim was to find out investors’ attitudes towards environmental, social and governance (ESG) criteria. Norms-based screening is a strategy that involves assessing each company held in the investment portfolio against specific standards of Environmental, Social and Governance performance. Particularly, the investors had to report whether they think ESG factors have an impact on investment returns. According to the results, a large proportion of the interviewed investors (** percent) claimed that taking ESG criteria into account while performing an investment analysis would lead to a higher return on investment (ROI).

The leading ESG fund in the United States at the beginning of 2025 was Xtrackers MSCI USA Climate Action Equity ETF, with net inflows of over *** billion U.S. dollars. The following two ESG funds with the largest inflows were iShares ESG Aware MSCI USA ETF and iShares ESG Aware MSCI EAFE ETF. In fact, *** out of the most popular sustainable funds in the United States as of first quarter of 2025 were ETFs.

In 2023, a significant portion of respondents had mixed views on portfolio allocation to Environmental, Social, and Governance (ESG) funds in Europe. Individual investors who were unsure about the allocation of capital to ESG funds accounted for ** percent. During that year, non-ESG investors who were likely to consider sustainable investments stood at ** percent, a decrease of **** percentage points compared to 2021.

In 2023, a significant portion of respondents in Europe agreed that Environmental, Social, and Governance (ESG) funds should never invest in sectors such as deforestation, pornography, weapons, or pharmaceutical manufacturers. During that year, the share of investors who were against investment in all these sectors was above ** percent.