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In December 2024, the US Sustainable Investment Forum (US SIF)1 released the 15th edition of its Report on US Sustainable Investing Trends. Calvert was proud to once again be a sponsor of the report, which provides critical insight into not only the size of the US sustainable investment market, but also the trends affecting the attitudes and priorities of US asset management firms and institutional asset owners. For responsible investors like Calvert, the report serves as a benchmark to measure our own strategies against such industry trends and a tool for advocacy to promote the continued development of this market.
The data and findings included here are particularly relevant for Calvert. Analyzing trends in sustainable investing is critical for our work, since the additional information on where investors and asset owners see the biggest opportunities helps us validate that our research team continues to focus on the most relevant themes that will potentially drive value and results for investors.
Among the key findings of the current trends report are:
- At the start of 2024, there were approximately $6.5 trillion in US sustainable investment assets under management, representing 12% of the total US assets under professional management.2 This year's report reflects significant enhancements, including an improved, data-driven methodology setting a new baseline for tracking sustainable investment trends.
- Even considering the increased domestic scrutiny around sustainability matters, 73% of survey respondents expect the sustainable investment market to grow significantly in the next 1-2 years. Key drivers for this include client demand, regulatory evolution, and advances in data analytics.
- Climate action was identified as the top sustainable investing priority over the long but also short term. Other thematic priorities include biodiversity, energy transition, human health, social inclusion and Indigenous Peoples' rights.
- Respondents expect to maintain or increase their use of sustainable investment strategies under the new administration, with the highest anticipated increase being impact investing (37%) and sustainability-themed investing (36%).
Partial or full fossil fuel exclusions have become the most frequently reported negative screen (68%), surpassing tobacco exclusions (66%). At Calvert, rather than exclude specific sectors entirely, we seek to maintain a research-driven approach that assesses both the most financially material risks associated with any business activity and the opportunities potentially stemming from evolving business models and the companies positioning themselves most competitively to capture those potential benefits.
- Respondents expressed a desire for increased transparency and disclosure, better data to support informed decision-making in sustainable investing, and improved communication and education on the topic.
Bottom line: Calvert's time-tested investment philosophy is built on gathering, synthesizing and evaluating data to determine how concepts related to environmental, social and governance factors affect operating companies' financial performance. US SIF and its Trends Report does the important work of aggregating the issue areas where industry participants see the greatest opportunities, which in turn allows us to more deeply analyze and ensure we understand these factors, their influence and implications for investors' portfolios.
1 US SIF is the US membership association for professionals, firms, institutions and organizations engaged in sustainable and responsible investing. US SIF has advanced sustainable, responsible, and impact investing for more than 30 years in order to ensure that the capital markets can drive positive social, environmental, and governance practices. Calvert has been a member of US SIF since 1982.
2 US SIF calculates the market size based on SEC disclosures via Forms ADV (Money Managers) and 13F (Asset Owners) with US-registered addresses. Adjustments are made to avoid double counting between institutional investors and asset managers.
Risk Considerations: There is no assurance a portfolio's investment objectives will be achieved. Investing involves risks. ESG Strategies that incorporate impact investing and/or Environmental, Social and Governance (ESG) factors could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. As a result, there is no assurance ESG strategies could result in more favorable investment performance.
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