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Economy

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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Economy

Charted: Public Trust in the Federal Reserve

Public trust in the Federal Reserve chair has hit its lowest point in 20 years. Get the details in this infographic.

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The Briefing

  • Gallup conducts an annual poll to gauge the U.S. public’s trust in the Federal Reserve
  • After rising during the COVID-19 pandemic, public trust has fallen to a 20-year low

 

Charted: Public Trust in the Federal Reserve

Each year, Gallup conducts a survey of American adults on various economic topics, including the country’s central bank, the Federal Reserve.

More specifically, respondents are asked how much confidence they have in the current Fed chairman to do or recommend the right thing for the U.S. economy. We’ve visualized these results from 2001 to 2023 to see how confidence levels have changed over time.

Methodology and Results

The data used in this infographic is also listed in the table below. Percentages reflect the share of respondents that have either a “great deal” or “fair amount” of confidence.

YearFed chair% Great deal or Fair amount
2023Jerome Powell36%
2022Jerome Powell43%
2021Jerome Powell55%
2020Jerome Powell58%
2019Jerome Powell50%
2018Jerome Powell45%
2017Janet Yellen45%
2016Janet Yellen38%
2015Janet Yellen42%
2014Janet Yellen37%
2013Ben Bernanke42%
2012Ben Bernanke39%
2011Ben Bernanke41%
2010Ben Bernanke44%
2009Ben Bernanke49%
2008Ben Bernanke47%
2007Ben Bernanke50%
2006Ben Bernanke41%
2005Alan Greenspan56%
2004Alan Greenspan61%
2003Alan Greenspan65%
2002Alan Greenspan69%
2001Alan Greenspan74%

Data for 2023 collected April 3-25, with this statement put to respondents: “Please tell me how much confidence you have [in the Fed chair] to recommend the right thing for the economy.”

We can see that trust in the Federal Reserve has fluctuated significantly in recent years.

For example, under Alan Greenspan, trust was initially high due to the relative stability of the economy. The burst of the dotcom bubble—which some attribute to Greenspan’s easy credit policies—resulted in a sharp decline.

On the flip side, public confidence spiked during the COVID-19 pandemic. This was likely due to Jerome Powell’s decisive actions to provide support to the U.S. economy throughout the crisis.

Measures implemented by the Fed include bringing interest rates to near zero, quantitative easing (buying government bonds with newly-printed money), and emergency lending programs to businesses.

Confidence Now on the Decline

After peaking at 58%, those with a “great deal” or “fair amount” of trust in the Fed chair have tumbled to 36%, the lowest number in 20 years.

This is likely due to Powell’s hard stance on fighting post-pandemic inflation, which has involved raising interest rates at an incredible speed. While these rate hikes may be necessary, they also have many adverse effects:

  • Negative impact on the stock market
  • Increases the burden for those with variable-rate debts
  • Makes mortgages and home buying less affordable

Higher rates have also prompted many U.S. tech companies to shrink their workforces, and have been a factor in the regional banking crisis, including the collapse of Silicon Valley Bank.

Where does this data come from?

Source: Gallup (2023)

Data Notes: Results are based on telephone interviews conducted April 3-25, 2023, with a random sample of –1,013—adults, ages 18+, living in all 50 U.S. states and the District of Columbia. For results based on this sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level. See source for details.

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