Eurosif, the European Social Investment Forum, has just published the « European SRI Study 2006 ». This unique study highlights the scale and progress of European Socially Responsible Investment (SRI) across nine countries (Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Switzerland and the United Kingdom).
Based on a survey of funds under management, the report reveals that the Broad European SRI market is now estimated to be up to 1 trillion and representing as much as 10-15% of the total European funds under management. This represents a 36% growth since December 31, 20021. SRI is growing in many countries and is particularly booming in Spain and Austria.
Eurosif’s Executive Director Matt Christensen states: Readers of the Study will find a European SRI market that has considerably changed since 2003, when we last published our report. 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.
The research shows that the three key drivers of the growth in SRI are the increased credibility of the business case in the financial community, business and financial services regulation that requires more transparency and incorporation of Social/Environmental/Ethical (SEE) issues, and a growing use by the fund management community of strategies such as Engagement and Integration which may be used across all assets, regardless of whether they are specifically subjected to SRI mandates.
European SRI remains driven by institutional investors, with pension funds increasingly demanding that their asset managers incorporate SEE and Governance issues into the management of their assets. This is both due to the strong pull provided by some leading institutional investors as well as the high quality of services provided by SRI managers.
Finally, the study highlights greater diversification in SRI. 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.
