What Drives Sustainable Finance Fatigue?

In this Public Discussion Note on "What Drives Sustainable Finance Fatigue?", Prof. Philipp Krueger, SFI Senior Chair and Professor of Responsible Finance at the University of Geneva, and Dr. Cyril Pasche, SFI Senior Director, explore the growing disillusionment with ESG investing and sustainable finance.

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.

Read the SFI Public Discussion Note in English | French | German | Italian