A.Even if some still have doubts: Sustainable investments are the trend among investors. Between 2017 and 2019, the volume of so-called ESG investments for institutional investors in Germany, Austria and Switzerland tripled to 576 billion euros and for private investors even quadrupled to 252 billion euros. In 2024, this could account for up to 55 percent of the managed assets in German-speaking countries, writes Strategy &, the strategy consultancy of the management consultancy PwC in a study.
Sustainability is no longer seen as a cost factor, but appears to many investors as a promising addition to their portfolios. However, the increase was not particularly strong in Germany, but rather in Switzerland, which in 2019 accounted for three quarters of ESG investments in German-speaking countries.
Strategy & assumes three scenarios for the future: If further EU regulation still enables traditional investment strategies and regular funds remain the dominant asset class, ESG offers should grow with the total volume and reach a share of 15 to 20 in 2024. If, on the other hand, the legal requirements offered clear incentives for ESG-compliant funds, the share could reach 30 percent; with very strong regulatory incentives and a high level of self-motivation on the part of investors, it could reach 55 percent by 2024 and thus a volume of 3.8 trillion euros .
The corona pandemic did not stop the massive trend, but rather accelerated it, says study author Robert Bischof. Asset managers would have to decide whether they would continue to regard ESG requirements as a mandatory topic or would rather set themselves apart from the competition with a specific offer. Anyone who wants to go well beyond the minimum regulatory requirements should also anchor ESG beyond the product portfolio in their own corporate mission statement and proactively drive market developments, and not just hope for further regulatory incentives for investors. “Ever more demanding investors are forcing asset managers to set up a comprehensive strategy now in order to counter the increasing complexity in the ESG jungle with well thought-out offers,” says Bischof.
Many asset managers could be heading for their own “Kodak moment” if they didn’t react promptly to the ESG trend, says Bischof, referring to the former photography company that invented digital photography at the time, but failed to develop it ready for the market and in the end went into bankruptcy. In addition to dealing with your own market positioning, you need a strategic foresight that is already awaiting the further development of the specifications. In addition, the topic must be consistently promoted at board level.