Global ESG funds in Q2 saw inflows of $4.9 billion following outflows of $11.8 billion in Q1, according to a new report by Morningstar.

European investors invested $8.6 billion of new money into ESG funds in Q2 after redeeming $7.3 billion in Q1. However, in the US investors withdrew funds for the 11th consecutive quarter, with withdrawals totalling $5.7 billion. Global ESG fund assets rose by 10% in the second quarter to $3.5 trillion, supported by stock market appreciation.

Hortense Bioy, Head of Sustainable Investing Research at Morningstar Sustainalytics, said,
“Despite the ESG backlash and the volatility sparked by geopolitical tensions and US tariffs, the picture for ESG funds improved last quarter. European Investors have returned to ESG funds, marking a notable reversal from the redemptions seen in the previous quarter. While it’s still doom and gloom in the US, ESG funds in other parts of the world continue to attract money and regulators outside the U.S. are largely maintaining their course.”

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