The authors trace the slowdown to a mix of factors, including declining ESG fund performance, rising political resistance—particularly in the U.S.—regulatory overload, and mounting concerns over greenwashing and limited real-world impact.

Despite these headwinds, the authors emphasize that key segments—such as green bonds, green loans, and thematic ESG strategies—remain resilient, and that long-term structural drivers like climate risk, high carbon prices, and generational preferences continue to support sustainable investing. 

The authors call for a pragmatic recalibration of ESG strategies: one focused on financial materiality, measurable impact, and credible implementation—less susceptible to hype, but better equipped to deliver results.


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