ESG Attitudes Tracker: sentiment sours among financial advisers and wealth managers

Performance concerns

Pessimism about the performance of ESG-focused strategies has plumbed new depths, with only 10% of intermediaries expecting ESG investing to improve performance and 51% expecting it to worsen returns – a net favourability score of -41%. 

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^{Source: AIC/Research in Finance. * Net favourability score is the % of respondents who expected ESG investing to improve performance, charges or risk minus the % who expected it to have a detrimental effect.} 

This continues the downward trend in performance expectations since 2021, when a net 31% of respondents expected ESG to improve performance.

Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “Intermediaries perceive ESG strategies to have lost money and their patience is wearing thin. Ongoing concerns about greenwashing don’t help, and knowledge of the new sustainability labels is still low.

“The bottom line is that if intermediaries see a trade-off between ESG investing and returns, then returns are going to come first, unless clients have specific ESG requirements.”

Slowdown in demand

The research found that only 11% of clients proactively raise the subject of ESG in meetings, down from 13% last year and 20% in 2022.

The percentage of intermediaries who expect ESG demand to increase over the next 12 months has fallen from 60% last year to just 34% this year. The percentage who expect demand to decline has increased from 10% to 24%.

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^{Source: AIC/Research in Finance.} 

Persistent scepticism over ESG claims

Only 1% of intermediaries “completely trust” sustainability claims made by funds, barely an improvement on 0% last year. The FCA’s new sustainability labels have had some impact, with 28% of respondents saying they had increased their trust in such claims, but a much greater number – 60% – said they had had no impact. One intermediary commented: “I haven’t really engaged. They could probably do more to publicise it.” Another remarked: “I don’t think clients are terribly aware.”

Of the four labels, Sustainability Focus and Sustainability Impact were the most likely to be used and understood, with less enthusiasm for the Sustainability Improvers and Sustainability Mixed Goals labels. Over two-thirds (68%) of respondents said they had not used any of the labels yet.

Opinion has become more negative – for the first time

As a result of these developments, intermediaries’ general opinion of ESG investing has declined for the first time in four years. A third of respondents (34%) reported that their opinion had become less favourable, while only 14% had adopted a more favourable view. 

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^{Source: AIC/Research in Finance.} 

The findings contrast with sentiment towards ESG among private investors, which has improved over the past year.

ESG remains embedded

Despite intermediaries’ lack of enthusiasm for ESG, it remains embedded in the way they do business. The overwhelming majority (96%) recommend sustainable funds, up from 89% last year. Intermediaries report that an average 16% of client assets are in sustainable funds, similar to previous years.

While a majority of intermediaries (54%) offer ESG investing to clients depending on their goals and objectives, over a quarter (27%) say it is an embedded part of their philosophy and process. One respondent said: “ESG is not an add on. It is just part of the normal process for selecting the funds within the portfolio.”

One bright spot amid the general negativity is that intermediaries feel ESG reporting has improved. Among those who refer to ESG or impact reporting from asset managers, a majority (54%) said that all or most of it was satisfactory, up from 42% last year and the highest figure since the Tracker was launched in 2021.

Ratings agencies continue to receive mixed reviews, with only 20% trusting ESG ratings and 79% saying that ratings providers should be more transparent about their processes. Two-thirds (67%) feel the move to regulate ratings providers should help.

Engagement versus exclusion

While intermediaries still tend to favour a strategy of engaging with companies over excluding them from portfolios, the gap between the two views has narrowed.

Given a binary choice between the two approaches², 50% of intermediaries favoured engagement and 39% preferred exclusion.

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^{Source: AIC/Research in Finance.}

Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “The question of engagement versus exclusion divides intermediaries. While most still like the idea of engagement in principle, there are also murmurs of doubt about how effective engagement is and whether asset managers are prepared to divest if it doesn’t work. That scepticism could be behind the rising interest in exclusion, which is a simpler approach for funds to demonstrate and for advisers to explain to clients.”

- ENDS -

Notes to editors

1. The ESG Attitudes Tracker is an annual sentiment survey of private investors and intermediaries. Only findings that relate to intermediaries (financial advisers and wealth managers) are included in this press release: the findings that relate to private investors featured in a previous press release. There have been five waves of this research since it was launched in 2021. The fifth wave of the research consisted of an online survey of 400 private investors and 200 intermediaries, conducted between 7 July and 25 July 2025. This was supported by 12 in-depth interviews, six of them with private investors and six with intermediaries, conducted between 21 July and 15 August 2025. The ESG Attitudes Tracker is commissioned by the AIC and conducted by Research in Finance.
2. Respondents were asked to choose which of the following two statements best represented their view: (a) “I think there are certain industries/activities that should simply be excluded from funds/investment trusts that have an ESG/sustainable objective” and (b) “I think exclusion isn’t the answer and it is always better to engage with companies and try to influence them”. They could also choose (c) “Neither of the above”.
3. The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 291 members and the industry has total assets of approximately £269 billion.
4. For more information about the AIC and investment trusts, visit the AIC’s website.
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