A recent study published by Eurosif, the European Social Investment Forum, estimates the broad European market for socially responsible investment (SRI) to be over 1.6 trillion CHF which represents a growth of 106% over the past 3 years. Eurosif estimates this to represent as much as 10-15% of the total European funds under management. The study highlights the scale and progress of European SRI across nine countries, including Switzerland where asset managers were among the first to offer SRI and which can today be considered one of the leading countries for SRI in Europe.
Socially responsible investment is also growing in Switzerland where total SRI assets under management at the end of June 2006 are estimated at 12.4 billion CHF, according to a recently updated survey carried out by the Zurich based consultant onValues. This represents an overall growth of 17% during the first 6 months of the year. The survey also shows that for collective investment vehicles and structured products, with +19%, the Swiss SRI market continues to outpace the overall fund market, estimated by the Swiss Funds Association to have grown by 5.9% over the same period.
The assets managed according to the Ethos approach, a total of approximately 1.3 billion CHF, continue to represent a significant portion of this market, making up approximately 10% of the total SRI assets managed in Switzerland, and 16.5% of the market for collective SRI investment vehicles and structured products.
The Eurosif research shows that there are three key drivers that explain the growth in SRI: firstly, the increased credibility of the business case in the financial community; secondly business and financial services regulation requiring more transparency and incorporation of social, environmental, and governance issues; and thirdly a growing use of strategies such as proxy voting, engagement and integrated approaches which can be used across all assets and tailored to fit the specific interests of a broad range of clients.
As in Switzerland, European SRI remains driven by institutional investors, with pension funds increasingly demanding that asset managers incorporate social, environmental and corporate governance issues into the management of their assets. According to the Eurosif study, this is both due to strong demand by some leading institutional investors as well as the high quality of services provided by SRI asset managers.
The « European SRI Study – 2006 » is available via the Eurosif website: http://www.eurosif.org/publications/sri_studies.