Foreword

The 2018 Global Sustainable Investment Review was produced by the Global Sustainable Investment Alliance (GSIA), an international collaboration of regional sustainable investment organisations. The report highlights the continued growth of sustainable and responsible investing across five key regions—Europe, the United States, Canada, Japan, and Australia/New Zealand—with additional insights on Latin America and Africa. The work was supported by multiple financial institutions, including Hermes Investment Management, RBC Global Asset Management, and UBS.

Introduction

This fourth biennial review compiles data from regional sustainable investment forums and provides a global overview as of early 2018. Sustainable investing is defined as an approach that integrates environmental, social, and governance (ESG) factors into investment decisions. The report shows the growing mainstream acceptance of ESG considerations in financial markets. It also includes information from the African Investing for Impact Barometer and contributions from the Principles for Responsible Investment (PRI) on developments in the Americas.

Sustainable investing defined

The report outlines seven main sustainable investment strategies: negative or exclusionary screening, positive/best-in-class screening, norms-based screening, ESG integration, sustainability-themed investing, impact/community investing, and corporate engagement and shareholder action. These categories form the basis for the analysis of global and regional trends, with many investments applying multiple strategies simultaneously.

Global sustainable investment 2016–2018

Sustainable investment assets reached USD 30.7 trillion across the five major markets, representing a 34 per cent increase in two years. Japan recorded the fastest growth (over 300 per cent), followed by Australia/New Zealand and Canada. Europe remained the largest market, holding 46 per cent of global assets. Sustainable investments accounted for 63 per cent of total assets in Australia/New Zealand, 51 per cent in Canada, 49 per cent in Europe, 26 per cent in the United States, and 18 per cent in Japan.

Sustainable investment strategies

Negative or exclusionary screening was the most common global strategy, applied to USD 19.8 trillion in assets. ESG integration followed at USD 17.5 trillion, showing a 69 per cent increase since 2016. Corporate engagement and shareholder action ranked third at USD 9.8 trillion. While norms-based screening declined globally, sustainability-themed, positive, and impact/community investing each recorded strong growth rates, ranging from 50 to 90 per cent over the two-year period.

Global market characteristics

By 2018, institutional investors still held the majority of sustainable assets (75 per cent), but retail investment had grown to 25 per cent. Sustainable investments were diversified across asset classes, with 51 per cent in listed equities, 36 per cent in fixed income, and smaller proportions in property, private equity, and other assets such as infrastructure and commodities.

Regional highlights

In Europe, sustainable assets grew by 11 per cent to EUR 12.3 trillion but declined as a share of total assets due to stricter definitions and standards. ESG integration and corporate engagement were the fastest-growing strategies.

In the United States, assets reached USD 12 trillion, a 38 per cent rise. ESG integration dominated, with climate change, tobacco, and weapons the leading exclusion factors. Shareholder engagement on proxy access and political spending was prominent.

Japan experienced a fourfold increase, reaching 18 per cent of professionally managed assets. Corporate engagement led, followed by ESG integration. Growth was supported by regulatory reforms, such as revisions to the Stewardship Code and government encouragement for ESG adoption, including the Government Pension Investment Fund’s use of ESG indices.

Canada’s responsible investment assets increased by 42 per cent to CAD 2.1 trillion, representing 51 per cent of total assets. ESG integration and engagement were leading strategies, and impact investing rose by 60 per cent.

In Australia and New Zealand, responsible investing reached 63 per cent of total assets, with AUD 866 billion managed responsibly in Australia. ESG integration and engagement dominated, and negative screening grew significantly. In New Zealand, sustainable assets more than doubled, with a focus on ESG integration and exclusionary strategies.

Latin American markets advanced through new regulations, green bond initiatives, and ESG promotion by stock exchanges in Brazil, Mexico, and Colombia. Africa’s investing-for-impact market reached USD 428 billion, led by Southern Africa, with ESG integration as the dominant strategy.

Conclusion

Sustainable investing expanded across all major markets between 2016 and 2018. ESG integration, exclusionary screening, and shareholder engagement were the primary approaches. The rise in sustainable investment reflects growing recognition of ESG factors as essential for risk management, long-term performance, and positive social and environmental outcomes. Sustainable investment options are now accessible across asset classes and increasingly available to retail investors