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illuminem summarizes for you the essential news of the day. Read the full piece on Funds Europe or enjoy below:
🗞️ Driving the news: A recent report by PitchBook reveals a trend of 'greenhushing' in private markets, where asset managers are stepping back from public ESG commitments
• This reaction stems from fears of a backlash against green and sustainable investment strategies and concerns over accusations of greenwashing
🔭 The context: The focus within ESG (Environmental, Social, and Governance) investments has primarily been on environmental themes, while social-themed funds have seen a decline in popularity, particularly following the U.S. Supreme Court's ruling against race-conscious affirmative action programs in 2023
• This has led to a modification or rollback of DE&I (Diversity, Equity, and Inclusion) programs by private market participants to sidestep potential litigation
🌍 Why it matters for the planet: The retreat from ESG commitments and the decline in social-themed fund popularity highlights challenges in balancing social responsibility with regulatory and public scrutiny
• This shift impacts the allocation of investments towards environmental and social initiatives, potentially hindering progress in these areas
⏭️ What's next: Despite the challenges, there's no evidence that ESG strategies compromise returns. With the hope that regulatory frameworks like the EU’s SFDR will offer better data quality on private funds, there's potential for more informed ESG investment decisions
• Impact investing, particularly in climate-related strategies, remains a focal point, indicating that commitment to impactful investment hasn't waned entirely
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