Morningstar: Global Sustainable Funds expand by 9% in Q4 2021

ESG image

Global sustainable fund assets expanded by 9% in the fourth quarter, to USD $2.74 trillion by the end of December 2021.

According to Morningstar’s Global Sustainable Fund Flows report for Q4 2021, Europe continue to dominate the sustainable space, accounting for close to 80% of Q4 inflows, while the United States accounted for 10%.

Key takeaways include:

  • Product development remained strong, with 266 new sustainable fund launches globally in the fourth quarter. Asset managers also continued to repurpose and rebrand conventional products into sustainable offerings.
  • Inflows grew, driven by continued investor interest in ESG issues and by regulation. Investors poured $142 billion into sustainable funds globally, representing a 12% increase relative to Q3.
  • Flows clocked in at USD 15 billion for Canada, Australia, and New Zealand, Japan, and Asia combined.
  • Compliance with SFDR following its introduction on 10 March 2021 has led to an increase in ESG disclosure, though not yet in clarity. While our data team is still processing hundreds of newly updated legal documents and looking for funds that meet our criteria, based on our conservative sustainable fund definition, we have identified so far 536 funds that were repurposed in 2021, roughly double the number of 2020.

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