Launches of funds claiming environmental, social or governance attributes all but dried up in the past six months, as investors baulked at increased scrutiny of sustainability claims by companies and asset managers.
Just six funds citing environmental, social and governance factors launched in the second half of 2023, compared with 55 in the first half, and an annual average of almost 100 between 2020 and 2022, according to data from Morningstar Direct.
ESG labels have also been removed from some fund names. The asset manager Abrdn plans to drop the phrase “sustainable leaders” from two funds in February, according to a filing with the US Securities and Exchange Commission. Morgan Stanley and UBS also dropped ESG-oriented labels from some funds last year.