Our latest survey reveals a noticeable cooling of client interest in ESG and sustainable investing. Paraplanners highlight concerns over performance, shifting geopolitical sentiment, and clients stepping back once they understand the investment restrictions involved.
In our recent Parameters Survey, we asked how client sentiment toward ESG and sustainable investing has changed over the past 12–24 months.
The responses point to a clear trend in that ESG demand has softened, and in many cases clients are stepping back from sustainable options.
Only 5% of paraplanners reported increasing demand for ESG solutions. By contrast, 38% said interest had remained broadly stable, while 34% saw a decline.
Just over one in ten described a mixed picture, and 11% said they do not track ESG sentiment formally.
But it is the paraplanners’ own words that most clearly show what’s happening in client conversations.
Many of our survey contributors highlighted performance concerns as the primary factor behind declining demand. Several paraplanners noted that ESG options have been difficult to position when recent returns have lagged unconstrained portfolios.
One respondent said: “No real appetite unless it is truly evident that there is no performance trade‑off.”
Another commented: “Demand has dropped, reflective of returns vs our ‘standard’ portfolio.”
This sentiment was repeated consistently. One paraplanner observed: “ESG seems to have underperformed unconstrained. With wars and geopolitical uncertainty, it is less of a focus and clients feel less engaged when they see their returns suffer.”
Another stated simply: “IFA not keen on ESG due to performance issues. Only clients with strong preferences get it.”
Several paraplanners described a gap between clients’ initial ethical intentions and their ultimate investment choices.
One respondent put it: “Many people would love to be ethically focused, but it doesn’t really seem to change much when it comes to picking investments.”
Others said clients often reassess once they understand the constraints involved.
“Clients say they want ESG, but when it restricts their investment choices, they sometimes choose not to consider it.”
Geopolitical and societal shifts were also frequently mentioned.
A number of paraplanners pointed to the wider cooling of ESG narratives, with one writing: “Following the rollback of ESG efforts and the US Government’s repealing of initiatives, clients are sensing which way the wind is blowing.”
Some paraplanners emphasised that their client banks have simply never shown strong interest in ESG.
Comments included: “We have very few clients who are ESG invested,” and “We’ve never really had a large interest in ESG.”
Several also reported a noticeable decline in casework: “I haven’t had an ESG-related case in a while.”
A few respondents did note pockets of consistency, particularly among clients with deeply held ethical commitments. However, these appear to be the minority.
As one paraplanner put it: “It depends on their commitment to good causes rather than demographics or portfolio goals.”
Overall, paraplanners describe a market where ESG is still part of the conversation but perhaps not driving it. Instead, performance, diversification are a higher priority.
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