Around the globe, a wave of financial innovation seeking social and environmental benefits while producing attractive returns is shaping the exciting field of sustainable finance. From funds investing in forest conservation, to parametric insurance products improving the disaster resilience of countries; from micro-credit to small retailers through credit assessments based on trading patterns, to new affordable housing funds investing in projects de-risked through long-term rental contracts, the world of sustainable finance is becoming increasingly diverse. Sustainable finance is also growing strongly. One area that has posted dramatic expansion in recent years is investing in publicly listed corporations based on environmental, social, and governance (ESG) factors. In the United States, the world’s leading ESG market, total assets under management under ESG strategies have grown almost four-fold in eight years, and now represent $1 out of every $4 currently invested with professional asset managers.
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