The ESG party is just starting

Here’s a note from Nawar Alsaadi:

Yesterday, the FT put a short documentary called “Who Killed the ESG Party?” The documentary includes interviews with many of the usual suspects, who’s arguments I have disputed and debunked many times in the past. But, one has to wonder, did anyone within the anti-ESG bubble bothered to check if the ESG party is really at an end?

Below is a screenshot from Google trends capturing worldwide search for the term ESG from Jan 2004 to today. As can be seen from the chart, interest in ESG is still at an all time high. Meanwhile, global fund flows into sustainable funds (many of which carry the ESG label) continue to be positive, with flows into ESG bonds funds in particular exceeding 2022 and 2023 fund flows as of June of this year.

The above is understandable considering the fact that sustainable funds performance continue to exceed the performance of conventional funds in ALL regions. And last but not least, individual investors interest in sustainable investing globally is at a new high.

If the above were a party, the room would be jam packed (sustainable assets AUM), the music would be blasting through the roof (sustainable assets performance) and the line up outside the club would be several blocks long (percentage of investors interested in sustainable investing). This doesn’t feel much like an end, but more like the prelude to an incredible night!