Exponential growth of ESG funds: a comparison of funding speed and profitability

Abstract

In this paper, the general objective is to investigate and compare the speed of fundraising and the profitability of ESG Funds in relation to traditional investment funds in the Brazilian financial market between 2010 and 2021. To achieve this goal, we focused on three specific objectives: analyzing the growth rate of ESG Funds' net assets, evaluating the profitability of these funds and examining the impact of macroeconomic variables such as GDP, IPCA and interest rate (CDI) in this context. Using a quantitative methodology, the research analyzed comprehensive financial data on the funds, including information on asset value and profitability indicators. The results show an exponential growth in the ESG Funds' assets over the period studied, setting them apart from traditional funds. In addition, the profitability of ESG Funds proved to be competitive, often surpassing that of conventional funds, suggesting a paradigm shift in the Brazilian financial market. This study provides valuable insights into the evolution of ESG Funds in Brazil, highlighting their growing importance and potential for economic sustainability. The analysis of macroeconomic variables also revealed that ESG Funds not only remain resilient in different economic scenarios, but can also offer a sustainable and profitable path for investors aware of environmental, social and governance challenges.