What happened to ESG investing?

A recent study into ESG investing by Invesco found that a shift is occuring away from Central Banks and Sovereign Funds maintaining an ESG policy. This apparent step back is not a sign of waning interest but rather a reflection of the rising maturity and higher standards in the ESG investing landscape.

The primary driver being a rationalisation of what truly constitues an ESG driven investment or asset allocation framework.

As the graphic illustrates, now that ESG is under greater scrutiny and the market seeks more clarity, investor and capital allocators are far more cautious on a range of issues led by their concerns over Greenwashing and the quality of ESG Data & Ratings.