Asset and wealth managers find it increasingly difficult to carve out an ESG strategy that will appeal to investors. As investors and the broader public get more sophisticated about ESG matters, they are questioning the claims of commitment to sustainably invested assets and ostensibly sustainable products.
With the growing demand for ESG-compliant assets, more investors are concerned that their fund and wealth managers are only paying lip service to these themes. The ambition to stake out ESG-friendly territory may have even led some well-intentioned companies to overstate their actual commitments, Bain analysis shows, or at least push the boundaries of what investments could be considered sustainable. At the same time, the number of business press articles on greenwashing—conveying a misleading impression about how an asset is environmentally sound—has soared at a 147% compound annual growth rate over the past three years.
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