The concept of investing in environmental, social, and governance (ESG)-centric products is not new. Institutional investors have long modeled their investment strategies around socially responsible themes such as clean air and water, diversity, human rights, and workplace fair practices. However, sustainable investing in its current form has recently experienced considerable market momentum, driving large inflows into ESG-focused products, resulting in an average Compounded Annual Growth Rate (CAGR) of 27 percent in global assets under management (AUM) over the last six years.

There’s been a significant jump in AUM for ESG-centric products, particularly in the past two years of the COVID-19 pandemic.

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Asset managers must prepare their people, processes, technology, and data to incorporate ESG-friendly investments into their produce offerings.