On a High Note: 75% of Sovereign Wealth Funds Pursue Impact Investments

On a High Note: 75% of Sovereign Wealth Funds Pursue Impact Investments

A new Invesco Global Sovereign Asset Management Study reveals that 75% of sovereign wealth funds (SWFs) and 47% of central banks have formally adopted environmental, social, and governance (ESG) investment policies. This is a significant increase from 46% and 11%, respectively, just five years prior. The combined assets of the 81 SWFs and 58 central banks included in the survey amount to approximately $23 trillion.

Despite claims from anti-ESG capitalists, including Vivek Ramaswamy and Peter Thiel, Invesco data shows that ESG investment policies are the responsible choice for both shareholders and the climate. Alongside direct emissions reduction measures, strategies like impact investing, active engagement, and the sell-off of high-emitting assets allow companies to take accountability for their historically adverse climate impacts.

Experts are optimistic that the ESG trend will continue. “Sovereign wealth funds and central banks are increasingly putting ESG at the heart of their investment strategy,” said Invesco’s Head of Official Institutions Rod Ringrow. “While challenges remain, including concerns about data quality and greenwashing, it is clear that sovereign investors believe that they can develop strategies to overcome these issues.”

SEC: ESG Investing - Office Hours with Gary Gensler, March 3, 2022.

Boston Consulting Group: Insights from Larry Fink on the Future of Sustainable Investing, July 7, 2021

WSJ: More Money is Flowing into Green Energy than Ever Before. Here's Why, Jan 6, 2021.

DW: Can Green Investing Change the World, Jan 15, 2021.