The Rise of ESG Investing

How Investment Managers Can Seize a $50 Trillion AUM Opportunity

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About This Report
Spiking client demand for ESG-focused investment products will drive AUM growth over the next three years. Yet a lack of quality or public ESG data threatens investment managers’ ability to offer accurate products and might see them run afoul of rising ESG regulatory standards.
Table of Contents

Executive Summary

Spiking client demand for environmental, social, and governance (ESG) products will drive assets under management (AUM) growth through 2025. Yet a lack of quality, public ESG data threatens investment managers’ ability to offer accurate products and might see them run afoul of rising ESG regulatory standards.

3 KEY QUESTIONS THIS REPORT WILL ANSWER

  1. Why do investment managers need a strong ESG offering?
  2. What’s at stake for investment managers that fail to overcome the ESG data challenge?
  3. How can investment managers harness technology to roll out personalized ESG products and meet rising regulatory standards?

WHAT’S IN THIS REPORT? We size up investment managers’ ESG AUM opportunity, examine the risks investment managers will face if they fail to accurately label their ESG funds, and lay out strategies they can use to delight clients and mollify regulators.

KEY STAT: Global investment managers will be competing for roughly $9 trillion in fresh ESG AUM between 2022 and 2025, as total AUM will surpass $50 trillion, per 2022 research from Bloomberg Intelligence.

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    Table of Contents

    1. Executive Summary
    2. Key Points
    3. Investment Managers Can’t Afford to Miss the ESG AUM Train
    4. Definitions and Scope
    1. Why Investment Managers Need Market-Leading ESG Products
    2. What’s Hindering ESG Data Quality?
    3. Poor-Quality ESG Data Creates Significant Risks for Investment Managers
    4. How Investment Managers Can Capture the ESG AUM Growth Opportunity
    1. Insider Intelligence Interviews
    2. Read Next
    3. Sources
    4. Media Gallery

    Interviewed for This Report

    Jon Hale
    Morningstar
    Global Head of Sustainability Research
    Interviewed March 14, 2022
    Ben Webster
    OWL Analytics
    CEO
    Interviewed March 17, 2022

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    authors

    Michael Tattersall

    Contributors

    Tyler Brown
    Senior Analyst
    Maria Elm
    Senior Analyst
    Daniel Ramirez
    Researcher, Financial Services