Has sustainable investing lost traction? This is the main question many sustainable investors are pondering after a challenging 2023. ESG investing has gone through turbulent times over the last few years and has largely fallen out of favour due to the tough global macroeconomic environment. High levels of inflation, aggressive interest-rate hikes, geopolitical tensions across the world (Ukraine-Russia-NATO, China-Taiwan, the Red Sea and the Middle East) as well as anti-ESG sentiment that has been rising in the US have all slowed the rapid ascent of ESG investing.
Although the ride will be bumpy – US elections are a clear ‘wild card’ – there are reasons to expect a resurgence in interest in this thematic in 2024. Sustainability is undoubtedly an unstoppable trend that will become of ever-increasing prominence. As soon as there is a clear path to central banks cutting rates, we expect sustainable investing to see a gradual recovery.