The review, which assessed 170 investment funds across 41 asset managers, found that although headline ESG scores continued to edge slightly higher, underlying progress has slowed sharply, and significant gaps remain across climate strategy, stewardship, and the day-to-day integration of ESG risks.

Indeed, XPS downgraded a number of asset managers after identifying weakened or softened climate commitments, warning that political uncertainty around sustainability should not deter firms from setting “clear, credible climate strategies”.

While 90 per cent of asset managers had a diversity and inclusion (D&I) policy in place, only 61 per cent had firm-level D&I targets, highlighting further inconsistency in commitment.

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The post ESG progress declines for second consecutive year amid political uncertainty appeared first on ESG Foundation.