The global universe of sustainable open-end and exchange-traded funds (ETFs) attracted an estimated US$16 billion of net new money in the final quarter of last year, according to Morningstar Sustainalytics. This is up from US$9.2 billion in the quarter before, the report said. “Global sustainable funds ended 2024 on a high note, achieving their strongest quarterly inflows of the year,” said Hortense Bioy, Head of Sustainable Investing Research at Morningstar Sustainalytics. “This fresh flow of capital, however, shouldn’t hide another reality.” Over the full year of 2024, global ESG funds recorded their lowest inflows since 2018, while the rest of the market enjoyed a boom, the report said. This was partly driven by the US, where redemptions from sustainable funds in Q4 slid to US$4.3 billion compared to the US$2 billion in outflows in Q3. “2025 might be a reset yet, with anti-greenwashing rules reshaping the ESG fund market, companies reaffirming or rolling back their sustainability initiatives, and governments reviewing their priorities amid a changing geopolitical and economic landscape,” said Bioy. “These are new developments that sustainability-focused investors will have to navigate.”
