A record $52.3bn of assets were invested in ESG exchange-traded funds (ETFs) and exchange-traded products (ETPs) at the end of November 2019, data from research and consultancy firm ETFGI reveals.
This represents an increase of 7.4% from $48.7bn at the end of October.
Europe leads the way, with 118 ESG products and 54% of the assets, the data shows.
Since the launch of the first ESG ETF/ETP in 2002, the number and diversity of products has increased steadily, with 269 ESG ETFs and ETPs listed globally at the end of November 2019 – with 753 listings from 71 providers in 58 countries.
The record month saw global listed ETFs and ETPs gather net inflows of $2.6bn and seven new ESG ETFs and ETPs launched.
The market has grown substantially from 2018, when there were 206 ETFs and ETPs with total assets of $22bn, according to ETFGI.
The firm said the significant inflows last year can be attributed to the top 20 ETFs and ETPs by net new assets, which collectively gathered $1.48 bn in November – with JPMorgan’s ESG Ucits ETF accounting for $201.25m alone.
However, the research company warned that confusion persists around what constitutes an ESG fund.
“According to the UN-backed Principles for Responsible Investment, 56% of adopters believe there is a lack of clarity in ESG definitions,” the firm said.
“ETFGI’s classification system attempts to provide greater precision, with ETFs/ETPs listed globally organised into categories, including core ESG products and theme-based groups, such as clean/alternative energies and gender diversity,” ETFGI added.