Last month, Summit Consulting released its report on Environmental, Social, and Governance (ESG) investment tools for the U.S. Department of Labor (DOL).
The report, which can be found on DOL's website, seeks to inform DOL, investors, and advisors on ESG investing as it relates to retirement savings. ESG investing incorporates environmental, social, and governance issues into the selection and management of investments.
Summit Director Oswaldo Urdapilleta, who co-authored the report, said "This report is the first one of its kind, a comprehensive look at ESG investing and its relationship to retirement funds. As public pension funds and private retirement plans look for investments that are closer to their values, investors will benefit from the detailed information and comparisons made in this report."
The report provides a review of the academic and industry literature regarding ESG investing and retirement savings, and an environmental scan of ESG investment tools available to investors.
The report notes that total U.S.-domiciled assets under management (AUM) invested in ESG options grew from $6.57 trillion in 2014 to $8.72 trillion in 2016, a 33% increase (or an 18% increase after accounting for general market growth). This growth is driven by investor demand for ESG investments. Because of this growth, ESG investments now form a significant share of total U.S.-domiciled AUM (22%).