Over the past few years, sustainable investing has gained traction in the United States as more investors look to put their money into companies that prioritize environmental, social, and governance (ESG) factors. This trend has been driven by a growing awareness of the impact that businesses have on society and the environment, as well as a desire among investors to align their investments with their values.
According to a report from the Global Sustainable Investment Alliance, sustainable investing assets in the United States reached $17.1 trillion in 2020, up from $12 trillion in 2018. This represents a significant increase in the proportion of total assets under management in the country that are invested in sustainable funds.
One reason for the rise of sustainable investing is the growing demand from millennials and other younger investors who are more socially and environmentally conscious than previous generations. This has led to the development of a range of sustainable investment products, including mutual funds, exchange-traded funds (ETFs), and impact investing funds.
Another factor driving the trend is the growing recognition among businesses that prioritizing ESG factors can have a positive impact on their bottom line. Companies that prioritize sustainability are seen as more attractive to customers, employees, and investors, and may also be better positioned to weather environmental and social risks.
However, there are also some concerns about the rise of sustainable investing. Some critics argue that ESG metrics are difficult to measure and that sustainable investing can be more of a marketing ploy than a genuine commitment to sustainability. Others worry that the focus on ESG factors may distract investors from more traditional financial metrics.
Despite these concerns, the trend towards sustainable investing in the United States shows no sign of slowing down. As investors increasingly seek to align their investments with their values, sustainable investing is likely to continue to grow in popularity, driving change in the business world and creating new opportunities for impact-oriented investors.
