Niche no more: Sustainable investing now accounts for $17.1 trillion in assets under managementNovember 18, 2020By Anthony EamesDirector of Responsible Investment Strategy, Calvert Research and ManagementWashington - Strategies that incorporate environmental, social and governance (ESG) principles continue to be a growing part of the investment landscape, and the 2020 "Report on US Sustainable and Impact Investing Trends" from US SIF: The Forum for Sustainable and Responsible Investment, which Calvert was proud to be a sponsor of, has some impressive numbers that illustrate how far we've come.US SIF found that sustainable investing assets now account for $17.1 trillion in assets, or approximately one out of every three investment dollars under professional management. This is a 42% increase from the $12 trillion under management in 2018, the previous edition of this biennial survey.1At the start of 2020, $16.6 trillion in U.S.-domiciled assets were held by institutional investors, money managers and community investment institutions that practice "ESG incorporation" — applying ESG criteria in their investment analysis and portfolio selection. Two trillion in U.S.-domiciled assets were held by similar groups that filed or cofiled shareholder resolutions on ESG issues at publicly traded companies from 2018 through 2020. Adjusting from the overlap, since some entities qualify in both areas, results in the $17.1 trillion total.Key issuesMoney managers and their institutional investor clients cited climate change/carbon emissions, sustainable natural resources/agriculture and board issues as the three ESG issues they specifically considered most often. Climate change was the most important, applying to $4.2 trillion in assets, while governance issues related to executive pay saw the greatest growth, at 122% from 2018 to 2020.Investor advocacy has also been prominent over the past two years. From 2018 through the first half of 2020, 149 institutional investors and 56 investment managers filed or cofiled shareholder resolutions on ESG issues. This group represents nearly $2.0 trillion in assets under control at the start of 2020. Corporate political activity was the most common subject that generated proposals, with 270 being filed over this time period. Fair labor and equal employment opportunities, which includes the gender pay gap, was next at 228, followed by climate change at 217.Bottom line: With nearly one-third of the assets under professional management falling under the umbrella of sustainable investing, as defined by US SIF, responsible investing continues to establish itself as a mainstream approach.