Sovereign wealth funds ESG investments triple in size in 2021

ESG is a big deal right now. But how big?

New data by Finbold shows that sovereign wealth funds investments in the Environmental, Social, and Governance (ESG) space globally rose 215 per cent between 2020 and 2021, from $7.2 billion to $22.7 billion. The number of deals rose from 19 to 37.

In 2019, the ESG funds investment stood at $5.2 billion, while in 2018, the figure was $6 billion, a slight drop from 2017’s value of $6.6 billion. Over the last six years, 2016 recorded the least investment at $3.7 billion.

Elsewhere, in 2021, sovereign funds' involvement in the oil and gas space dropped by almost half to $6.9 billion. Last year also recorded the lowest deals in oil and gas at 8. The SWFs also pumped $7 billion in black investments for 2017, dropping from 2016’s value of $10.4 billion.

The report highlights the increasing focus on ethical investing in the sovereign space. According to the Finbold report:

“Last year’s growth indicates that the ESG space has a financial appeal for investors, and SWFs play a crucial role. In general, the SWFs are uniquely positioned to promote the global environmental, ESG agenda and investing in certain products is the first step.”

Report here.