The bottom line still matters

Responsible Investing (RI) shows resilience despite macroeconomic and geopolitical pressures. As per Capital Group’s ESG Global Study 2025 (ESG Global Study 2025), global ESG adoption remains high at 87%, only slightly below the 90% peak in 2023–2024. Investors cite geopolitical risk, economic‑growth uncertainty, and regulatory or policy changes as the primary challenges. Still, more than 90% of ESG adopters have maintained or increased their allocations over the past year, with a similar share planning to do so in the year ahead. 

Even as RI faces heightened political scrutiny in the United States, evidence shows that U.S. asset managers remain broadly committed to sustainable investing. The U.S. SIF Sustainable Investing Trends Report 2025/2026 finds that nearly 70% of U.S. institutions say they remain committed to sustainability’s long‑term future, despite political pressure and media backlash. (US Sustainable Investing Trends 2024/2025 | US SIF) 

In Europe, responsible investment markets remain robust, with continued inflows and increasingly demanding stewardship expectations. As per Amundi’s Responsible Investment Views 2026 (Responsible Investment Trends 2026 | Amundi Research Center), by 2025, European RI inflows reached €108 billion in the first three quarters alone, accounting for more than 95% of global inflows. By 2026, Europe’s policy agenda has transitioned from merely expanding disclosure obligations to simplifying and clarifying which metrics are genuinely decision‑useful for investors, supporting more efficient implementation across the market. These regulatory simplifications aim to enhance usability and improve the real‑world impact of end‑investor decisions. 

Over the past five years, responsible investment strategies have, on average delivered competitive but lower returns (+11.4% annualised) compared with the developed global equity which showed an annualised return of +13.1% over the same period.  

The performance gap is not out of the ordinary and we do expect periods of performance deviation (positive or negative) between SRI strategies and the broad market over the short term. However, over the long term we would expect reduced deviation in performance.  

Over a longer period however, the difference is negligible. For a 10-year period, the average of SRI return was +11.1% annualised against an annualised return of +11.3% from broad developed equity. Despite geopolitical shocks, inflation cycles, and shifting sector trends, SRI approaches have generally maintained resilient performance, showing that climate-aligned, responsibly built portfolios can hold up well against traditional global equity approaches. 

For investors seeking to incorporate responsible investing into long‑term investment strategies, speak to a Davy adviser.