| SRI assets representing 10-15% of the total European funds under management |
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| 17/09/2006 | |
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The European Social Investment Forum (Eurosif) says that the "broad" European socially responsible investment market* now amounts to approximately €1 trillion, up 36% since the end of 2002, and could account for as much as 10 to 15% of the total European funds under management. "Across Europe, there are signs of robust SRI strategies, increased mandates from institutional players and the growing involvement of more traditional financial services providers. The one constant in the field is that European SRI continues to be an area of diversity and innovation," said Matt Christensen, Eurosif's executive director. Eurosif, however, advised caution when interpreting its findings about the size of the market. "Today, the Broad SRI market is estimated to be as high as 10-15% of total European funds under management. Nevertheless, readers should exercise caution with this estimate as the findings of this 'supply side' study would be strengthened by an equivalent study on the 'demand side' of SRI. Furthermore, the data in this study is self-disclosed, so it is reasonable to assume that there is diversity in the quality and depth of the types of services delivered by fund managers." The Eurosif study makes the distinction between "core" SRI, which only covers SRI strategies based on ethical exclusions and positive screens, and "broad" SRI, which includes the aforementioned strategies plus those based on simple exclusions (including norms-based screening), as well as those based on engagement and integration. The market has been pushed primarily by broad SRI, while core SRI has been relatively stable except for some young markets, according to Eurosif. "Core SRI continues to act as the vanguard on some of the leading issues in the field, often incorporating moral values into the screens that are employed", reports the organisation. "Broad SRI, on the other hand, is increasingly looking towards a linkage to corporate governance, often a more palatable option for institutional investors. This is reflected in the recent creation of the Principles for Responsible Investment by UNEP-FI, which encompasses Environmental, Social and Governance (ESG) rather than Social, Environmental and Ethical (SEE) criteria and has received endorsement from many large institutional investors and fund managers." Institutional vs. retail investments in Europe, December 31st 2005  Source: Eurosif The SRI market remains driven by institutional investors, and pension funds increasingly demand that their asset managers incorporate governance issues along with the more traditional SEE criteria as part of their SRI management strategy, according to Eurosif. Besides this shift in the SRI approach, investors are also diversifying the assets managed according to a SRI strategy. For instance, France's civil servants supplementary pension scheme, the ERAFP, said that it would invest its entire €6bn fixed income portfolio according to SRI criteria. "This includes asset allocation, where bonds are making progress, as well as a foray towards newer asset classes such as structured products or real estate. The diversification also points to a growing trend for innovation in SRI strategies; combining screens with engagement and/or integration are increasingly used as investors further refine their SRI approaches to fit the interests and needs of their clientele." SRI investment vehicles  Source: Eurosif * The study conducted by Eurosif covers nine countries: Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Switzerland and the United Kingdom J.L. |
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