Sustainability issues are becoming more important to European investment managers as the number of socially responsible investing (SRI) funds is set to grow. According to a report conducted by Milan-based sustainability consultancy firm Avanzi, 188 SRI funds were available in Europe in 1999. The number has increased during 2000, and it’s now around 220. The results of the study shows how the UK leads the market in terms of numbers and assets under management, with 67 funds representing a total of e4.6bn.
The fact that performance figures seem to be proving that sustainability is profitable and the increasing demand from investors, both private and institutional, for this type of products is turning the European investment industry into a greener and more socially responsible market.
Following the UK, with 42 and 22 funds respectively, are Sweden and Switzerland, countries with a long tradition in SRI issues, with assets of more than E1bn in both cases.
France and Belgium had both 14 funds and the Netherlands 11. Germany, is far behind other large European countries, with only 10 funds.
In terms of assets under management, the big surprise comes from Italy. With only five SRI funds in the market, the total assets represent almost E2.3bn More surprising is the fact that the largest proportion of these assets is managed by only one investment house, SanPaolo IMI. Two of its ethical funds, the Fondo Azionario Internazionale Etico and the Fondo Obbligazionario Etico, have total assets of around E1.8bn between the two. This increases the average SRI fund size in Italy to E459m, the highest in Europe, followed by the Netherlands with an average of E83m and the UK with E69m.
The study gives the figure of E11bn as the total assets under management in SRI funds in the European retail market. This figure does not include those funds screened against SRI criteria but not sold as green or ethical products, those specialised in environmental service industry or those giving part of their commissions or profits to NGOs. To this figure it should be added the SRI assets under management in institutional accounts, and although there is not exact data on this area of the market, the increasing exposure from institutions, especially pension funds, to sustainable investments would increased considerably the total size of the European socially responsible funds industry.
Also, the study highlights that, although the number of SRI funds in Europe is going up, the assets per fund are still limited with an average of E60m.
This report co-ordinated by Avanzi, was conducted by sustainability research organisations EIRIS in the UK, Centre Info in Switzerland , Caring Co in Sweden, Observatoire de l’Etique in France and IMUG in Germany. Avanzi does also collaborate with the SiRi Group, the largest international coalition of social screening agencies, a global network which aims to provide information to SRI investors worldwide. IPE

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