Sustainable and ESG assets account for some $6.6 trillion of assets under management in the US, out of a total market size of $61.7 trillion, a new report by the US SIF Foundation has found.
According to the US Sustainable Investing Trends report, which outlines the current state of the US sustainable investment market, the value of sustainable investments is up slightly on the previous year, and now accounts for around 11% of total assets.
The study also found that more than half (53%) of investors expect the sustainable investment market to grow over the next year, however this is down considerably on the 73% that expected the market to grow a year ago, due to increased political pressures.
‘Moderated, not reversed’
According to the US SIF Foundation, political pushback has ‘moderated, not reversed’ ESG activity, with close to half (46%) of firms reporting that a government clampdown has had ‘no impact’ on how their organisation has approached sustainability.
Some 29% said that they now focus ‘explicitly on demonstrable financial materiality’, while one quarter have stopped using the ESG acronym.
When asked whether geopolitical events affected their decision to increase sustainable investments in 2025 or beyond, more than three fifths (62%) said that they political environment had ‘no effect’ on their decision, while over a fifth (22%) said hat they planned to increase investments.
No retreat
“What we’re witnessing is that there has not been a retreat from sustainable investing,” said Maria Lettini, CEO of US SIF. “Over three decades, we’ve seen this industry evolve from a niche concept to mainstream investment approach. The shifts we’re seeing reflect a pragmatic adaptation to the current environment while maintaining focus on the long-term drivers of value and changing market risks and opportunities.”
In terms of the core factors driving an increase in sustainable investment activities, climate change (52%), client-driven customised investing (41%), and severity and frequency of catastrophic climate events (38%) were cited as the top issues, followed by loss of biodiversity (34%) and food insecurity (24%).
Close to a quarter (23%) indicated that AI was ‘positively affecting’ their decision on whether to increase sustainable investments. In addition, on Indigenous Peoples’ rights, and migration, most respondents either maintained or increased engagement with these issues. Read more here.
