MODERN TRENDS IN THE DEVELOPMENT OF SUSTAINABLE INTERNATIONAL PORTFOLIO INVESTMENT PROCESSES

Abstract

The market for sustainable international portfolio investment is actively developing in response to global challenges related to climate change, social inequality, and the need to transition to sustainable economic development models. In today's world, this investment model is not only an ethical choice, but also a strategic necessity to ensure the long-term stability of financial portfolios. It is revealed that the main current trends in the development of sustainable international portfolio investment processes are: strengthening of regulatory control and transparency standards for sustainable investment – in the US and Europe, attention is increasing to the regulation of ESG investments, including the development of new reporting standards and the emergence of new regulatory documents; transition from “ethical investing” to the integration of ESG into the investment strategy – investors are increasingly integrating ESG factors into the overall investment strategy, and not just as a means of avoiding investments in certain sectors. The main reasons for this are the problem of “greenwashing” and the unstable economic climate, particularly in developing countries; an increase in the number of sustainable investment funds and their concentration in Europe and the US – in 2023, the market for sustainable investment funds continued to grow, albeit more slowly, with the number of such funds worldwide reaching 7.485, up 7% from 2022; the prevalence of green bonds in the GSSS bond market, declining interest in social bonds – green bonds continue to dominate the GSSS bond market, accounting for 60% of total issuance. In 2020-2021, a significant amount of investment in social bonds was related to the response to the pandemic. After the completion of such initiatives, this market segment is gradually declining; dominance of the corporate equity and shareholder action strategy – when considering the value of sustainable assets under management in terms of sustainable international portfolio investment strategies, the most common sustainable investment strategy among countries such as the United States, Canada, Japan, Australia and New Zealand is corporate equity and shareholder action with total assets under management of USD 8.06 trillion.