Retail investors are falling out of love with “woke” ESG funds because they underperform, a survey suggests.
A survey of 276 financial advisors by investment firm Schroders reveals a declining appetite for “sustainable investment solutions” on the part of clients.
It showed that only 17 percent of advisors had seen a small increase in demand for such products in recent months, down from 60 percent in November 2021.
James Rainbow, UK director at Schroders, said: “We’re definitely seeing people stop asking about sustainability from an investment context.”
ESG investing targets companies that meet ethical goals, but has been criticized for box-ticking and accusations of “greenwashing.”
Falling out of love: Survey of 276 financial advisors reveals declining appetite for ‘sustainable investment solutions’ by clients
Rainbow said investors had also noticed that ESG investments were not performing as well.
“I think people, strictly from an investment performance perspective, have seen some pretty challenging returns, particularly when we’re going through an energy crisis,” he added.
The findings formed part of Schroders’ Pulse Survey of financial advisers in the UK.