ESG initiatives continue to be the biggest magnet for investor funding, according to a recent study.
According to capital market company Preqin, there has been a three-fold increase in annual capital raised for ESG investments between 2020 and 2022.
The figure skyrocketed from $29 billion to $92 billion between 2020 and 2022.
European markets have the highest ESG-focused investment, with 79% of capital raised going to European ESG funds, according to the study.
As expected, the average ESG fund size has also increased, from $400 million in 2017 to almost $600 million in 2022.
Preqin’s survey found that 60% of investors surveyed believe ESG to be of average or higher importance in their investment decision making. In fact, investors are also turning away from deals that harm the environment, with 29% of investors saying they refused to make an offer due to ESG concerns.
13% of investors said ESG was of extreme importance as an investment consideration and 26% said it is of considerable importance.
With ESG investment fund-raising continuing apace, the market will likely continue to look to tap into investor appetite for ESG appropriate asset classes, the study noted.
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