IW Long Reads: Avoiding bursting point - Is ESG investing in bubble territory?

Threat looms as inflows towards sustainable products hit new highs

Anna Fedorova
clock • 8 min read

Last year was undoubtedly the year of ESG investing as sustainable funds attracted record inflows. Investment Association data showed UK retail responsible funds took in £7.1bn in net inflows in the first three quarters of the year, almost triple the inflows for the same period in 2019, while globally, assets in sustainable funds shot past the $1trn threshold. Against this backdrop, it is natural to ask the question: could ESG be the next bubble in investing? Some commentators believe certain characteristics of ESG investing make it prone to bubble-like behaviour. For example, in a recent...

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