Our second report produced in partnership with New Financial measures the penetration of ESG in different sectors of banking and finance around the world and highlights the challenges ahead for the industry.
Commitment to ESG has grown significantly since our last report, however there are notable disparities between financial sectors. While this commitment is nonetheless a welcome development, it must be galvanised into action in order to truly embed sustainability within finance.
However, where we can clearly measure ESG labelled finance, we have seen significant upticks in the values. ESG global bond issuance reached USD 900bn in 2022, a 46% increase when compared to 2020. ESG loan issuance has skyrocketed by 255% since 2020 to reach USD 500bn at the end of last year. Finally, within the investment fund industry, AuM stood at a remarkable USD 2.5 trillion globally, an 85% growth since 2020.
While there has been significant uptick in ESG activity in the past years, in most sectors and regions it is still a small fraction of the total. Europe remains the global leader in most areas of activity, but the US and APAC are rapidly gaining ground.
50%
Half of global ESG labelled bonds and loans issuance is issued in Europe
1.8x
The growth rate of global ESG labelled bond issuance from 2020 to 2021
2/3
Two-thirds of all large European banking and finance firms are committed to ESG