European investors’ use of thematic strategies soared by 20 percentage points in the past three years, driven by their desire to have a positive impact through their investments.
Consumer demand for the strategies rose from 46 per cent to 65 per cent according to research by BNP Paribas, with 70 per cent saying it is because of their desire for positive impact.
Some 63 per cent pointed to the expectation that investing thematically would enhance their investment returns.
Those who did not invest in thematic strategies cited concerns over performance (49 per cent) and high fees and costs (41 per cent) as the reasons why.
The most appealing sustainable themes among investors are renewable energy (56 per cent) and climate change solutions (49 per cent), with 23 per cent of investors showing an interest in water themes and 17 per cent in demographics and ageing populations.
Pieter Oyens, co-head of global product strategy at BNP Paribas Asset Management said thematic ESG investing is fast becoming “mainstream” to help investors tackle long term sustainability issues that have the potential to transform markets and create value across portfolios.
“Investors are aligning across multiple objectives relating to performance and fiduciary duty, whilst navigating the ever-evolving regulatory landscape,” he said
Constance Chalchat, global markets chief sustainability officer, BNP Paribas said although there are divergences in the pace and current composition of ESG thematic investing across regions, the significant momentum seen in Europe is here to stay.
Thematic funds are those built around a specific theme.
The report, called the thematics barometer, was conducted among 188 institutional investors and intermediary distributors between February and April this year.
sally.hickey@ft.com
