Most investors expect Europe’s ESG ETF market to remain stable or expand this year, according to the latest survey from BNP Paribas Asset Management released Monday.
The percentage of investors expecting ESG ETF assets under management to remain stable or grow over the next 12 months was 81%, according to BNPP AM’s twice-yearly European ESG ETF Barometer survey conducted in the second half of 2022. That’s down from 91% in the first half of 2022.
“The results of the latest survey show that investor expectations can change very quickly depending on market conditions and regulatory developments,” said Lorraine Sereyjol-Garros, global head of development ETF and index solutions at BNPP AM, in a new release.
The most recent survey found particular interest in low-carbon strategies aligned with the Paris Agreement and renewed confidence around sustainability labels.
For 66% of the investors surveyed, the exchange-traded funds now on the market “show real sustainability benefits,” the release said. That was the case for 74% of Swiss investors, compared to 54% in Italy, and for 85% of pension funds compared to 56% of asset managers.
Interest in low-carbon, emissions reduction or PAB-aligned (Paris-aligned benchmark) strategies rose sharply over the past six months, to 36% from 14% in the first half of 2022, with notable disparities between countries, the survey found. Interest in battery innovation, hydrogen and the electrification of transport increased to 33% from 8%.
For investors in ESG ETFs, the three most important criteria were sustainability labels and certification (18%), the management company’s ESG credibility and expertise (15%) and tracking error against benchmark (14%), the survey found.
It also saw 67% of investors consider ESG voting and engagement policies to be robust, with active dialogue to support companies in their energy transition plans.
