For the first time ever, ESG funds saw net global outflows amid a major exodus by US investors from environmental, social and governance (ESG) strategies.
In all, the global sustainable fund market experienced net redemptions of US$2.5 billion in the fourth quarter, marking an historic low point for the industry. US scepticism towards ESG follows years of attacks by Republicans who accuse the strategy of being “woke” and anti-capitalist. Legislators in New Hampshire have even sought to criminalise ESG. At the same time, investors have started to question the strategy’s staying power, after an extended period of poor financial returns.
