· 2 min read
illuminem summarises for you the essential news of the day. Read the full piece on Financial News or enjoy below:
🗞️ Driving the news: Revenues from ESG funds stagnated in 2024, rising only 2% for both ESG bond and equity funds, according to Fitz Partners
• This marks the second consecutive year of slow growth, contrasting sharply with the previous ESG boom
• Meanwhile, non-sustainable funds saw stronger revenue gains, reflecting a shift in investor sentiment
🔭 The context: The ESG sector experienced explosive growth in the early 2020s, with management fees increasing over 300% at its peak
• However, growing concerns about greenwashing and political backlash have dampened investor enthusiasm
• Asset managers are now facing scrutiny over the credibility of ESG-labelled products
🌍 Why it matters for the planet: Reduced interest in ESG products may slow private capital flow into sustainable industries
• Investor scepticism highlights the need for stronger standards and transparency to restore trust in ESG investing
• A decline in ESG momentum risks undermining global climate finance goals
⏭️ What's next: Asset managers may reevaluate ESG strategies and focus on credibility to regain investor confidence
• Regulatory bodies could introduce tighter rules around ESG disclosures and fund labelling
• Long-term, sustainable finance may need a rebrand or reset to ensure continued growth
💬 One quote: "With greenwashing fears mounting, ESG funds are facing a credibility crisis that is starting to hit the bottom line," – David Ricketts, Financial News
📈 One stat: ESG bond funds in Europe generated $221 million in revenue in 2024 — up just 2% from the previous year
See here detailed sustainability performance of companies like BlackRock, and Amundi
Click for more news covering the latest on ESG
