Esg funds, strong outflows but the explanation must be sought in the UK
According to the Morningstar Sustainalytics report, there was a net outflow of USD 84 billion in 2025. Noteworthy are the moves of some UK pension funds
Sustainable investments exiting one portfolio and entering another, but always with an ESG label. This is what happened in 2025: according to data provided by Morningstar Sustainalytics, global sustainable funds saw a net outflow of $84 billion compared to a plus sign of $38 billion in 2024. For the first time since ESG investments have been mapped (2018), Europe saw an outflow of $62 billion.
The Moves of the British
In addition to geopolitical issues, the American data provider, in the report by the team led by Hortense Bioy, provides a possible technical explanation for the strong outflow: what happened especially in the last two quarters of 2025 (EUR 49.6 billion outflowed between July and September, and EUR 20 billion in the last three months of the year), is mainly attributable to British institutional investors who then reinvested through tailor-made ESG mandates.
"For example, the majority of outflows in the third quarter," the report says, "were driven by redemptions from four authorised, UK-domiciled BlackRock contractual schemes, following a client pension fund's decision to transfer assets from these funds to BlackRock's customised Esg mandates.
The same applies to another large UK manager, Scottish Widows. 'This trend,' the paper points out, 'continued in the fourth quarter, when Scottish Widows shifted resources from a large collective fund to a segregated mandate with an ESG orientation. In Europe, in first place for negative net inflows is Scottish Widows with about $8.5 billion, followed by BlackRock (including iShares etf) with $3.817 billion.
World Ranking
There is, however, one thing to note. Thanks to rising stock markets, global sustainable fund assets grew by 4% to $3.9 trillion. Internationally, it is BlackRock (including the iShares etf) that manages the highest assets of sustainable products at around $453 billion, but its net inflows fell by $3.676 billion. In second place in terms of Esg assets under management is Amundi with almost 216 billion and positive net inflows of 8.664 billion.
