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Many Happy Returns
Sustainable Investing: The End of ESG?
Mar 13, 2024
Delving into the decline of ESG investing popularity and exploring the challenges faced by fund managers. Discussing the evolution of ESG terminology and impact investing, alongside the complexities of sustainable investing. Exploring the differences between WTI and Brent Crude, and the significance of oil price benchmarks in the global economy. Understanding contango and backwardation in investment strategies, especially in relation to oil exposure and roll costs.
32:01
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Quick takeaways
- ESG funds are experiencing significant outflows due to underperformance and backlash, leading to closures and rebranding.
- The challenges of objectively evaluating companies based on their ESG performance highlight the need for more standardized metrics.
Deep dives
ESG Funds Facing Backlash and Outflows
ESG funds, which promised to save the planet while providing higher returns, are now experiencing significant outflows as investors withdraw their money due to disappointing performances and a growing ESG backlash. Fund managers are not only avoiding launching new ESG funds but are also shutting down existing ones. The trend of closures and rebranding away from the ESG label is evident, with 32 sustainable funds closing last year and six dropping the ESG badge. The sharp decline in investor interest and the underperformance of ESG funds compared to non-ESG options, as highlighted by statistics, indicate a shift away from the once-popular ESG trend.
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Discover
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