Investors withdraw from ESG funds (2022)
| Environmental, social, and corporate governance |
|---|
|
| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Reuters reported on November 11 that ESG investment funds have seen an uptick in fund withdrawals over the last several months. In a piece titled “Money before climate; market downturn spurs ESG fund exodus,” the newswire said the following:
| “ | Funds adhering to environmental, social, and corporate governance (ESG) principles have been hit by unprecedented outflows in the market downturn, as investors prioritize capital preservation over goals such as tackling climate change.
ESG, a classification applied to fund assets currently worth an estimated $6.5 trillion, is being tested by a drop in market values fuelled by concerns that central banks hiking interest rates to fight rampant inflation will trigger an economic recession. Investors souring on ESG funds could pose a challenge to governments seeking to enlist them in the fight against climate change. Policymakers at the COP27 climate talks in Egypt are trying this week to secure more financing from the private sector to help lower carbon emissions. Data from research service Refinitiv Lipper shows that funds of equities, debt and other asset types dedicated to responsible investing posted net outflows globally of $108 billion this year to the end of September, the first time investors withdrew money from them over such a long period since Refinitiv started tracking them in late 2017. Moreover, investors pulled money out of responsible investment funds - defined as such because they use criteria like ESG or religious values in their investment decisions - faster, relative to their size, than broader market funds for all but two months of 2022 through September, the data shows…. Only 31% of actively managed ESG equity funds beat their benchmarks in the first half of 2022, compared to 41% of conventional funds, according to Refinitiv Lipper. This represents a reversal of fortunes compared to the previous years.[1] |
” |
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
| |||||||||||||||||||||||
