The conversation around ESG investing has undoubtedly become more polarised lately. Once uncontroversial and seen as a force for good, it is sometimes now the subject of scepticism and political controversy on the one hand and concerns over greenwashing on the other.
Some asset managers – especially US-based – have also left the important industry-wide climate alliances, due to perceived litigation risk and political pressure. Against this backdrop, it is not surprising that many headlines paint a bleak picture. But does this align with the available data on European investor and adviser preferences?
We conducted a survey across Europe last year to cut through the noise and find out what financial advisers and their clients truly think about ESG and sustainability. What we discovered was something far more nuanced than the prevailing narrative suggests. While it is true that some investors are growing wary of ESG, the underlying interest in sustainability remains strong. In fact, in many cases, advisers are reaffirming commitments to sustainable investing, seeing it as both necessary and a driver of long-term alpha.
Our study found that 59% of European-based advisers still expressed strong interest in ESG, and 34% planned to increase recommendations for sustainable investments over the coming year. These numbers suggest a more resilient commitment to sustainability than one might expect. This resilience highlights that despite the short-term noise, many investors continue to believe in the long-term benefits of ESG, both in terms of financial returns and a positive societal difference. The ability to adapt to changing expectations will be key in ensuring ESG investing remains relevant and effective.
So, why is there a disconnect between perception and reality? A key reason is that ESG investing is evolving. It is no longer just about checking boxes or following regulatory mandates. Investors want measurable outcomes, with 58% of clients now asking for clear, tangible ESG results. This shift from vague commitments to data-driven accountability is forcing the industry to adapt, and this is a positive development. As ESG matures, the focus is shifting toward transparency, impact measurement, and aligning investments with broader sustainability goals.
Our survey found that climate change remained the dominant ESG theme, particularly renewable energy, which resonated with 75% of clients. However, regional differences emerged. For example, in Europe’s largest economy Germany, advisers reported a significant rebound in ESG interest, with 51% showing a strong commitment – up 12% from the prior year.
In Spain, 60% of advisers said their clients remain engaged in sustainability, with a notable focus on ESG driving overall investment returns – which is almost double the emphasis seen in other markets. More than two-thirds of Italian respondents said they were particularly driven by the desire to create positive change. ESG remains a priority in Switzerland, as 68% of advisers expressed a strong interest in sustainability. Here, advisers placed a premium on technological solutions for a low-carbon economy.
Despite this, challenges remain. Scepticism about the benefits of ESG was a deterrent for 61% of those who do not currently invest in these solutions, while 57% worried about the potential for lower returns. Asset managers continue to have a responsibility to demonstrate that ESG investments can deliver financial returns alongside the benefits to society overall. Transparency and clear communication will be essential in overcoming these concerns and proving that ESG strategies can deliver robust financial performance while making a meaningful difference.
The takeaway? ESG is not dead – it is maturing. Investors are becoming more discerning, demanding higher standards and clearer results. At Nordea Asset Management, we have been integrating ESG and sustainability for more than 35 years. We have seen many trends come and go over this period, but one thing remains clear: sustainable investing is here to stay. The challenge now is not whether ESG will survive, but how we will evolve to meet the growing expectations of investors who want to align profit with purpose.
