Environmental, Social, and Governance (ESG) factors are becoming essential in corporate strategies and investment decisions, attracting significant financial flows. Despite inflows to sustainable funds rising dramatically from 2018 to early 2022, enthusiasm has waned, leading to a notable decline in contributions. Criticism of ESG includes claims it diverts attention from profit-making objectives and the lack of consistency in ESG ratings. Nevertheless, the focus on environmental sustainability and social governance initiatives continues to grow, highlighting the ongoing relevance of ESG in today’s business landscape.
ESG is increasingly becoming a mandatory part of company strategies and a key tool for attracting investments, but it also faces significant scrutiny and criticism.
Sustainable fund inflows jumped from $5 billion in 2018 to $87 billion in the first quarter of 2022 but cooled with inflows dropping to $33 billion by Q2.
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