The amount of ESG professionals boomed thereafter and job titles like Head of ESG were created by businesses who wanted a sharp focus on sustainable performance.
Those businesses that took ESG seriously were seen as future-proofed, forward thinking enterprises, ready to transition away from the mistakes of the past. As such, they became much more attractive to investors. With this preference made clear, all businesses began scrabbling to reach the same benchmark, lest they be left behind.
So why now, in 2024, does it seem as though investors are losing interest in the ESG credentials of businesses?
The newest data on investor belief in ESG
The Association of Investment Companies (AIC) produces an annual ‘ESG tracker’, surveying the sentiments of businesses and investors alike. In its recently published report for 2024, the AIC shows that investor interest in ESG has fallen for the third consecutive year.
The survey, which polled 400 investors and 202 intermediaries, reveals a steady decline in those considering ESG factors when investing, dropping from 66% in 2021 to 48% in 2024.
Performance concerns are at the heart of this shift, with only 17% of respondents believing ESG investing is likely to improve returns, down from 22% last year. The report shares an interesting contribution from one surveyed investor, who says: “I want to do good, but it has to be a balance between that and getting returns.”
So, where is the direct correlation between sustainability and profitability that was so widely reported a decade ago? Are investors reticent to have their money spent on businesses in the tricky transition to net zero?
