ESG drivers impacting investment decisions worldwide 2023, by region

ESG ratings have emerged as the top factor influencing investment decisions globally in 2023, with varying impacts across regions. In Europe, 27 percent of institutional investors considered ESG ratings as a key driver, followed closely by Canada at 25 percent. In the United States, 17 percent of investors noted influence from this driver, while APAC shows minimal influence at just 2 percent. 

Sustainable Development Goals and ESG ETF Investments

Climate action, represented by Goal 13 of the United Nations Sustainable Development Goals (SDG), has become the primary focus for ESG ETFs globally. As of 2024, assets worth 75.1 billion U.S. dollars were linked to this goal, with 280 out of 552 ESG ETFs targeting climate action. This emphasis on environmental concerns has aligned with the broader overall trend of investors prioritizing companies with strong ESG practices and ratings. 

Regional Variations in Sustainable Fund Demand 

While the demand for sustainable funds has remained relatively stable or has been perceived to increase across some regions, differences have been notable. In the United States, 14 percent of investors reported decreased demand for sustainable funds compared to non-sustainable options. However, Canada stands out, with over 95 percent of investors having indicated stable or increasing demand. This regional variation underscores the importance of understanding local market dynamics when developing sustainable investment strategies.