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Visualizing the Global Rise of Sustainable Investing

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No matter where you look, climate change is at the centre of every conversation.

With a wide range of global sustainability challenges and complex risks on the rise, investors are starting to re-evaluate traditional portfolio approaches.

The ESG Boom

Today, many investors want their money to align with a higher purpose beyond profit. This infographic from iShares unpacks the prolific rise of sustainable investing, and how its trillion-dollar potential is sweeping across the world.

ESG Sustainability

What is Sustainable Investing?

Sustainable investing considers environmental, social, and governance (ESG) factors that create a lasting, positive impact on the world. As the term ‘ESG’ suggests, its scope goes well beyond environmental concerns alone. Examples include:

  • Environmental: Climate risks, resource scarcity, and clean energy
  • Social: Diversity, human rights, and cybersecurity
  • Governance: Business ethics, transparency, and anti-corruption

Simply put, it’s a force for good.

Although sustainable investing emerged in the 1970s, the movement has gained impressive traction in the last few years.

How Global Assets are Growing

Since 2012, total assets in sustainable investing have more than doubled:

Region2012 Assets2018 Assets
Europe$8.8 trillion$14.1 trillion
U.S.$3.7 trillion$12.0 trillion
Japan$0.01 trillion$2.2 trillion
Canada$0.59 trillion$1.7 trillion
Australia and New Zealand$0.18 trillion$0.7 trillion
Total$13.3 trillion$30.7 trillion

The U.S. and Europe are major players in this shift. In particular, specific legislation across European countries will continue driving ESG investment for years to come.

The European ESG Landscape

Across major economies in Europe, cultural shifts and new regulations are shaping the landscape of sustainable investing.

  • The UK has an ambitious net-zero greenhouse gas emissions target by 2050.
    Result: Most sectors will significantly ramp up their decarbonisation efforts to meet this goal.
  • As per France’s Article 173 (Energy Transition Law), investors must explain how they incorporate ESG factors into their investment strategies.
    Result: A majority of French institutional investors now manage their assets with ESG criteria in mind.
  • Nordic countries consider sustainability and social responsibility a cornerstone of their cultural mindset.
    Result: Nordic investors are increasingly integrating all three ESG aspects into their investments.

If Europe’s trajectory is any indication, sustainable investing will soon become second nature in other parts of the world too.

No Industry is Untouched

The rise of sustainable investing is a global phenomenon, and reaches a myriad of industries.

Here is a summary of just a few ESG efforts of some of the world’s most sustainable corporations:

CompanyIndustryCountryESG Efforts
Chr. Hansen A/SBioscience🇩🇰 Denmark• 100% green operations commitment by Apr 2020
• 82% of revenue directly supports UN Global Goals
AutodeskSoftware🇺🇸 U.S.• 100% renewable energy-run cloud services and offices
• 44% women on the Board
Banco do BrazilFinance🇧🇷 Brazil• $51 billion earmarked for green economy spending
• 99% adherence to Code of Ethics and Conduct Standards
City Developments LtdReal Estate🇸🇬 Singapore• S$100 million fully-allocated Green Bond
• 59% carbon emissions reduction target by 2030

The business world agrees: sustainable investing is smart investing.

How Can Investors Think Sustainably?

Many investment products allow investors to easily access sustainable investing, such as exchange-traded funds (ETFs) and index funds. These provide complete transparency—allowing investors to align their approach with the objectives that matter most to them.

Investors are able to:

  1. Screen out companies involved in controversial businesses
  2. Invest in companies with high ESG standards
  3. Advocate for specific issues like climate change

Not only this, but sustainable investing also has the potential to improve portfolio returns. In a 2015 paper covering ESG investing since the 1970s, 90% of ESG investing matched or overperformed traditional approaches.

The Bottom Line

Investors see a triple bottom line from sustainable investing: strong financial returns, and a lasting impact on both people and the planet.

As sustainable investing goes mainstream, it won’t simply act as a niche in a broader strategy—instead, it’ll be naturally integrated throughout a portfolio.

“With the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.

—Larry Fink, BlackRock Chairman and CEO

Sustainability is a global force that will continue to factor into everyday decisions.

Soon, sustainable investing will simply be considered “investing”.

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Environment

The Most Polluted Cities in the U.S.

What are the most polluted cities in the U.S. according to data from the American Lung Association’s 2024 State of the Air Report?

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Teaser image for an infographic showing the most polluted cities in the U.S. according to the American Lung Association's 2024 State of the Air report.

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The following content is sponsored by National Public Utilities Council

The Most Polluted U.S. Cities in 2024

According to the World Health Organization, air pollution is responsible for 7 million deaths annually, and could cost the global economy between $18–25 trillion by 2060 in annual welfare costs, or roughly 4–6% of world GDP.

And with predictions that 7 in 10 people will make their homes in urban centers by mid-century, cities are fast becoming one of the frontlines in the global effort to clear the air.

In this visualization, we use 2024 data from the State of the Air report from the American Lung Association to show the most polluted cities in the United States.

What is Air Pollution?

Air pollution is a complex mixture of gases, particles, and liquid droplets and can have a variety of sources, including wildfires and cookstoves in rural areas, and road dust and diesel exhaust in cities. 

There are a few kinds of air pollution that are especially bad for human health, including ozone and carbon monoxide, but here we’re concerned with fine particulate matter that is smaller than 2.5 microns, or PM2.5 for short. 

The reason for the focus is because at that small size, particulate matter can penetrate the bloodstream and cause all manner of havoc, including cardiovascular disease, lung cancer, and chronic pulmonary disease. 

The American Lung Association has set an annual average guideline of 9 µg/m³ for PM2.5, however, the World Health Organization has set a much more stringent limit of 5 µg/m³.

The 21 Worst Polluted Cities in the U.S.

Here are the top 21 most polluted cities in the U.S., according to their annual average PM2.5 concentrations:

RankCity, StateAnnual average concentration, 2020-2022 (µg/m3)
1Bakersfield, CA18.8
2Visalia, CA18.4
3Fresno, CA17.5
4Eugene, OR14.7
5Bay Area, CA14.3
6Los Angeles, CA14.0
7Sacramento, CA13.8
8Medford, OR13.5
9Phoenix, AZ12.4
10Fairbanks, AK12.2
11Indianapolis, IN11.9
12Yakima, WA11.8
13Detroit, MI11.7
T14Chico, CA11.6
T14Spokane, WA11.6
15Houston, TX11.4
16El Centro, CA11.1
17Reno, NV11.0
18Pittsburgh, PA10.9
T19Kansas City, KS10.8
T19Las Vegas, NV10.8

Note: The American Lung Association uses Core Based Statistical Areas in its city and county rankings, which have been shortened here to the area’s principal city, or metro area in the case of the Bay Area, CA.

Six of the top seven cities are in California, and four in the state’s Central Valley, a 450-mile flat valley that runs parallel to the Pacific coast, and bordered by the Coast and Sierra Nevada mountain ranges. As a result, when pollution from the big population centers on the coast is carried inland by the wind—cities #5 and #6 on the list—it tends to get trapped in the valley. 

Bakersfield (#1), Visalia (#2), and Fresno (#3) are located at the drier and hotter southern end of the valley, which is worse for air quality. The top three local sources of PM2.5 emissions in 2023 were farms (20%), forest management / agricultural waste burning (20%), and road dust (14%). 

Benefit to Economy

While the health impacts are generally well understood, less well known are the economic impacts.

Low air quality negatively affects worker productivity, increases absenteeism, and adds both direct and indirect health care costs. But the flip side of that equation is that improving air quality has measurable impacts to the wider economy. The EPA published a study that calculated the economic benefits of each metric ton of particulate matter that didn’t end up in the atmosphere, broken down by sector. 

SectorBenefits per metric ton
Residential Woodstoves$429,220
Refineries$333,938
Industrial Boilers$174,229
Oil and Natural Gas Transmission$125,227
Electricity Generating Units$124,319
Oil and Natural Gas$88,838

At the same time, the EPA recently updated a cost-benefit analysis of the Clean Air Act, the main piece of federal legislation governing air quality, and found that between 1990 and 2020 it cost the economy roughly $65 billion, but also provided $2 trillion in benefits

Benefit to Business

But that’s at the macroeconomic level, so what about for individual businesses?

For one, employees like to breathe clean air and will choose to work somewhere else, given a choice. A 2022 Deloitte case study revealed that nearly 70% of highly-skilled workers said air quality was a significant factor in choosing which city to live and work in.

At the same time, air quality can impact employer-sponsored health care premiums, by reducing the overall health of the risk pool. And since insurance premiums averaged $7,590 per year in 2022 for a single employee, and rose to $21,931 for a family, that can add up fast. 

Consumers are also putting their purchase decisions through a green lens, while ESG, triple-bottom-line, and impact investing are putting the environment front and center for many investors.

And if the carrot isn’t enough for some businesses, there is the stick. The EPA recently gave vehicle engine manufacturer Cummins nearly two billion reasons to help improve air quality, in a settlement the agency is calling “the largest civil penalty in the history of the Clean Air Act and the second largest environmental penalty ever.”

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