Maybank Research analysts Jigar Shah and Neerav Dalal examine this apparent dissonance in a quarterly report published on Feb 28. “[A] slowdown in launch of sustainability-linked products, greenwashing accusations and regulatory tightening led to the slowdown [in fund flows].”
Global sustainability fund inflows declined 68% over 2023 to US$60.2 billion ($80.28 billion) and even notched a US$3 billion net outflow in 4Q2023. This is the second year fund flow has declined after peaking in 2021 at US$620 billion.
However, Morningstar data shows that returns were higher last year, particularly among European names.
