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Climate-Themed Funds Jump by a Third

The number of mutual funds and exchange-traded funds with a climate-related mandate has increased by 32% so far this year, reaching a record 1,140 funds globally according to a report by Morningstar. European climate fund assets rose by 7.6% from €287 billion to €309 billion, with climate-conscious funds representing 37% of all climate funds launched, followed by climate-solutions funds at 31%, and clean energy and tech funds at 17%. However, global climate fund assets shrunk by 24% in dollar terms over the first nine months of 2022, with clean energy and tech funds being subject to US$43 million in outflows over this period. However, this marks only a minor dent for these funds, which received US$6.9 billion in inflows over the same period in 2021. Additionally, falling stock markets, lower inflows, and the strong dollar have caused a nearly 10% decrease in global assets in climate funds in the nine months through September 2022 to US$368 billion. Hortense Bioy, Morningstar’s Global Director of Sustainability Research, said: “The scale of capital needed for the transition is significant. With so many climate-aware fund options, understanding the range of strategies is an important first step in positioning portfolios to align with net-zero goals.”  

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