The global ESG investing market size is expected to reach USD 79.71 trillion by 2030, registering a CAGR of 18.8% from 2024 to 2030, according to a new report by Grand View Research, Inc. Environmental, Social, and Governance (ESG) investing has evolved from a niche approach to a mainstream investment strategy, reflecting a broader shift in how investors evaluate financial opportunities. As the global focus on sustainability and ethical practices intensifies, ESG investing is increasingly influencing market dynamics.
ESG investing integrates environmental, social, and governance criteria into investment analysis and decision-making with the aims to achieve long-term financial returns while promoting positive social and environmental outcomes. The market for ESG investments has seen substantial growth, driven by increasing awareness of climate change, social justice, and corporate governance issues.
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The market is also driven by governments and regulatory bodies worldwide implementing stricter guidelines for ESG disclosures. For instance, the European Union's Sustainable Finance Disclosure Regulation (SFDR) and the U.S. Securities and Exchange Commission's (SEC) proposed ESG disclosure rules are examples of initiatives aimed at enhancing transparency and standardization in ESG reporting.
Moreover, investors are increasingly seeking ESG-compliant funds, such as green bonds, ESG-focused mutual funds, and exchange-traded funds (ETFs). This trend is driven by both institutional and retail investors who are looking to align their portfolios with their values and mitigate risks associated with environmental and social issues. There is a growing emphasis on incorporating ESG metrics into financial analysis. Companies with strong ESG practices are often perceived as lower-risk investments due to their proactive management of environmental and social risks. Consequently, investors are integrating ESG criteria into their valuation models and investment strategies.
ESG Investing Market Report Highlights:
Based on type, the green bonds segment is expected to witness the fastest CAGR over the forecast period. International organizations such as the International Capital Market Association and the Climate Bonds Initiative have set guidelines to ensure the integrity and transparency of green bonds. These guidelines also facilitate cross-border investments and provide a framework for evaluating and certifying green bondsBased on investor type, institutional investors dominated the market with the largest revenue share of over 55% in 2023. Institutional investors are aware of the long-term ESG risks. They can identify and mitigate these risks by integrating ESG factors into their investment decisionsBased on application, the environmental segment dominated the market with the largest revenue share of over 25% in 2023. Consumers prefer companies that display a commitment to sustainability and environmental stewardship. This trend in consumer preferences drives businesses to adopt green practices and develop sustainable productsBrowse more reports published by Grand View Research.
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BlackRockBNP Paribas Asset ManagementGoldman Sachs Asset ManagementP. Morgan Asset ManagementMorgan Stanley Investment ManagementNorthern Trust Asset ManagementPIMCOState Street Global AdvisorsUBS GroupVanguard GroupAbout Grand View Research
Grand View Research is a full-time market research and consulting company registered in San Francisco, California. The company fully offers market reports, both customized and syndicates, based on intense data analysis. It also offers consulting services to business communities and academic institutions and helps them understand the global and business scenario to a significant extent. The company operates across multitude of domains such as Chemicals, Materials, Food and Beverages, Consumer Goods, Healthcare, and Information Technology to offer consulting services.
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