Global business leaders across all industries anticipate strong growth in ESG assets, and they are making investments in ESG with the same bottom line-driven focus as their non-ESG investments. A resounding 71 percent of global business leaders believe that, “Eventually, no investment decisions will be made without considering ESG.”
Top 3 Motivations for Considering ESG
According to the study, 32 percent of all respondents believe that renewables and clean energy yield the highest ROI today, and the same number believe this will be true for 2030—the highest value for any investment area.
But investors may be too focused on the most obvious ESG investments, and could be missing an opportunity to take a more holistic approach to sustainable investing.
At 27 percent, ESG fund managers see the highest ROI opportunity today in Financial Services, compared to 10 percent of Chief Sustainability Officers, 7 percent of government officials, and 13 percent of non-ESG fund managers.
Venture capital leaders stand out for their confidence in Life Sciences Tools and Services (16 percent) and Mobility (10 percent).
When we break down ESG and evaluate which element contributes most to shareholder value, Environmental carries the bulk of the weight today, and Renewables and Clean Energy receives the highest portfolio allocations.
BloombergNEF estimates that USD 2.1 trillion of investment is needed in the energy transition from 2022-25, nearly three times last year’s level. In addition to renewable energy projects, this figure includes electrified heat, energy storage and nuclear power.
These powerful, transformative forces, or megatrends, are perceived in different ways by different age groups. Younger generations have grown up in the internet age, but their formative years have been marred by the 2008 financial crisis and the ensuing recession, and then the Covid-19 pandemic. The current generation of senior professionals have also faced their own challenges during these global milestones.
Crises such as the war in Europe, spiraling energy prices and a looming recession in the world’s biggest economies are directing our attention to the challenges of the present. In the midst of such uncertainty, the future can seem unpredictable, which is why discussing megatrends is more vital today than ever; forcing our gaze forward to understand these forces of change can help us prepare for what is to come.
Bloomberg Media’s Megatrends Study, sponsored by Mubadala, explores how the experiences of various demographic groups shape their perspectives and expectations of megatrends. Based on our survey of 1,800 investors, engaged and informed millennials, and Gen Z consumers, the study delivers a comprehensive global view of the megatrends landscape, and what to expect by the end of the decade.
