Asian ESG funds are growing at a faster rate than anywhere else in the world, according to research from Barclays.
A report from the investment bank’s analysts shows that ESG funds based in Asia enjoyed inflows of 15% in 2022, more than three times the global average of 4%.
Inflows were also three times higher for ESG equity and bond funds than for non-ESG funds.
There was also a doubling of the funds’ market share – from 2% to 4%.
“The relative performance reflects the stronger investor appetite for sustainable investing in the region,” noted the Barclays report.
The Barclays analysts also stated that Asia’s ESG market has benefitted from developments in the US and Europe that slowed their respective markets for sustainable investment.
In the US, a backlash within Republican states against so-called ‘woke capitalism’ has seen some of the largest asset managers facing the threat of massive outflows from their ESG funds.
Meanwhile, EU managers are dealing with the reporting and disclosure requirements of the Sustainable Finance Disclosure Regime (SFDR), which has seen US$190 billion of funds downgraded from article 9 to article 8 within the last year.
According to the report, the Asian market is “catching up quickly” because of the aforementioned headwinds.
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