That is not to suggest that all clients are in the same boat when it comes to ESG: Some are much more committed than others, and there remains plenty of scepticism about ESG, even from those who have bought into the concept. Nor are fund selectors immune from critical commentators sowing the seeds of doubt.
So how can asset managers deal with this? Transparency must be placed above all else, and at every stage of the sales journey: Before sale, at point of sale, and in the ongoing reporting.
It will become critical for managers touting credible ESG offerings to provide clear and frank information to investors regarding the nature of any ESG products an asset manager is promoting, including giving an honest opinion on what any ESG product likely will or won’t achieve.
Not every ESG fund will save the world, and if investors are being misled regarding the exact nature of the ESG products they think they are paying for, the industry risks building a house of cards.