ESG investing popularity declines among UK investors over greenwashing fears

investmentweek.co.uk:

Among the 47% of investors who do not consider ESG factors when investing, the top reason given is prioritising performance over ESG issues.

The annual ESG Attitudes Tracker from the Association of Investment Companies showed that fears of greenwashing have grown. In 2021, 48% of respondents agreed with the statement «I am not convinced by ESG claims from funds». This rose to 58% in 2022 and hit 63% in this year's survey.

Investors continue push into ESG despite greenwashing concerns

Among the 47% of investors who do not consider ESG factors when investing, the top reason given is prioritising performance over ESG issues. This was followed closely by not being convinced by ESG claims from asset managers.

The weaker performance of ESG mandates over the last two years is another possible reason. Only 22% of investors think ESG investing is likely to improve performance, compared to 33% in 2021, while 24% think it will hurt performance, versus 20% two years ago.

Popularity of ESG investing wanes among UK investors

Richard Stone, chief executive of the AIC said: «Our ESG Attitudes Tracker suggests that 2021 may have been a high point for enthusiasm about ESG investing. There is plenty of residual support for the concept but concerns about greenwashing are increasingly dominating private investors' mindsets.

»These findings underline the importance of the regulator getting disclosure rules right, in particular the new labelling regime. A new regime with high standards that investors can rely on is essential for helping investors who care about ESG find products that align with their values and beliefs."

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