Investors have seen a rapid move towards ESG over the last few years, but this is also changing the broader approach to investing ideas according to Columbia Threadneedle Investments fund manager Sonal Sagar.
Investing sustainably is high on the fund management agenda in 2021, with Morningstar stating globally inflows into ESG funds topped $178bn in Q1 this year; up from $38bn in Q1 2020.
This approach to investing has evolved greatly in recent years as demand for strategies that achieve market-rate returns whilst simultaneously considering the positive environmental impact grows.
Threadneedle UK Sustainable Equity fund manager, Sonal Sagar, says that it is a "great thing" that the industry has been seeing a rapid move towards ESG investing over the last few years.
"Greater awareness for the environment, the social aspects and the desire to become more responsible custodians has resulted in a huge shift in the narrative of what the true goal of investing is," she notes.
Yet inconsistencies in terms of what sustainable/ESG investing comprises is creating instances of greenwashing and inconsistent disclosures, meaning fund managers like Sagar have to work harder to define their strategies - and responsibilities as sustainable asset managers.