Displaying items by tag: esg

Although the term “ESG” has become controversial and sometimes viewed as a marketing label, about 69% of institutional asset owners still report using it—primarily for consistency. Many prefer alternative labels: 57% use “sustainable investment,” 53% “sustainability,” and 52% “responsible investment.” 

ESG considerations now apply to an average of 44% of asset owners’ AUM globally, up from 42% last year. In 2025, 20% of respondents said they apply ESG to more than 75% of their portfolios, and 10% said ESG applies to 100% of their assets. 

Asset owners increasingly see ESG as aligned with fiduciary duty: 61% agree ESG supports that role, up from 53% in 2024. 

Finsum: The biggest barrier to broader ESG adoption is concern over impacts on investment returns or a lack of standardized data and reporting. 

Faith-based ETFs remain niche but are expanding, with six launching this year and total assets now around $10 billion. These funds aim to align investments with religious values, though many end up resembling S&P 500 trackers with higher fees. 

Currently, there are 46 such ETFs in the U.S., 38 Christian, seven Muslim, and one Jewish, which have attracted about $832 million in inflows year-to-date. Some apply strict screens, like the Inspire 100 ETF (BIBL), which excludes firms tied to abortion, LGBT activism, or gambling, while others, like SPUS, filter out half the S&P 500 for Sharia compliance. 

By contrast, funds such as the JLens 500 Jewish Advocacy US ETF (TOV) and the Global X Catholic Values ETF (CATH) closely resemble mainstream products like Vanguard’s VOO, differing mostly in expense ratios. 

Finsum: Advisors must weigh whether these products are genuinely value-aligned investments or simply pricier versions of broad index funds.

Faith-based investing is gaining momentum as an alternative to ESG, with Christian financial firm GuideStone noting a surge in demand over the past three years. Will Lofland, GuideStone’s Head of Investments Distribution, explained that many investors began seeking values-aligned strategies during the COVID era, when intentional living and faith-driven financial decisions gained traction. 

Unlike ESG, which often emphasizes broad social agendas, faith-based investing focuses on applying Christian principles to business practices, from employee treatment to product integrity. 

Younger investors have been early adopters, but GuideStone reports growing interest among baby boomers, who hold a significant share of wealth. Lofland stressed that faith-based investing is not about driving social change but encouraging companies to concentrate on core business excellence while adhering to ethical standards. 

Finsum: With rising interest across generations, the strategy is emerging as a powerful opportunity for advisor when pitching clients in the broader investment landscape.

Private equity firms are increasingly exploring thematic investing as a pathway for growth, blending financial returns with measurable social and environmental impact. Summa Equity has pioneered this approach through a “theory of change” framework, focusing on themes like resource efficiency and tech-enabled transformation. 

By investing across interconnected industries, the firm aims to tackle systemic challenges such as decarbonization while generating attractive long-term returns. This model contrasts with traditional ESG investing by emphasizing measurable outputs—like emissions reductions or improved quality of life—rather than compliance-based inputs. 

 “Brown-to-green” strategies, which transform undervalued, high-emitting businesses into sustainable leaders, can unlock massive value while addressing climate goals. 

Finsum: While many large PE firms have been slow to adopt this cross-sector strategy, thematic investing’s potential to deliver both impact and superior returns suggests it could reshape the industry’s future.

Despite political pushback and policy rollbacks, most large U.S. companies have maintained or even increased their sustainability investments in 2025, according to a survey by EcoVadis. 

Nearly half of executives said spending remains steady, while about a third reported higher investments paired with reduced public promotion — a trend dubbed “greenhushing.” The findings suggest that firms increasingly view supply chain sustainability as a strategic advantage, with many citing its role in attracting customers and maintaining operational stability. 

Only a small share have cut back, underscoring a belief among corporate leaders that sustainability supports long-term growth, even if it’s less publicly advertised. Concerns remain over regulatory rollbacks, with nearly half of C-suite leaders warning they could increase supply chain disruptions. 

Finsum: The data points to a quieter but still committed corporate approach to sustainability in the face of shifting political and regulatory landscapes.