ESG investment primed to increase in 2024

Environmental, Social and Governance allocations are due to increase among investors, according to a major new study.

Conducted by the deVere Group, which writes businesses in 70 countries, 56% of investors polled were planning on stepping up ESG financing next year. In total, more than 800 of the companies clients participated globally. 

Climate finance has been a central topic on the table at UN-sanctioned climate talks this month. COP28, which was held in Dubai, United Arab Emirates, has mobilised more than $80billion in capital for environmental research, development and projects, with hundreds of billions more expected to come from private pockets as a result of new regulations, requirements and opportunities. 

However, recent estimates suggest the ecological crisis is costing around $390million per day, giving some idea as to how much more money is needed to effectively mitigate the impact of pollution, global warming and habitat destruction. Meanwhile, previous market analysis has revealed that money flowing into green industries and technologies has been falling.

‘The surge in ESG-oriented investments is not just a statistical blip; it mirrors a fundamental shift in investor mindset,’ said deVere Group CEO and Founder Nigel Green. ‘People are increasingly drawn to ESG investments for a multitude of reasons, spanning ethical considerations to financial prudence. Investors are increasingly aware that their capital can be a force for positive change. ESG investments allow them to channel funds towards companies that actively contribute to a sustainable and socially responsible future.

‘Far from being a sacrifice for moral high ground, ESG investments are proving to be financially astute. Numerous studies suggest that companies with high ESG scores tend to outperform the market; and Reuters has reported that ESG positive funds outperformed globally over five years.’ he continued. ‘Companies with robust environmental, social, and governance practices are better equipped to navigate regulatory changes, reputational risks, and operational challenges. Investors are, therefore, drawn to ESG investments as a means of fortifying their portfolios against unforeseen risks.’

More on climate finance: 

Cash strapped and desperate? COP28 casts climate finance in sharp relief

UK investors prioritise short-term returns over nature outcomes