Sustainability has been a popular doubled-down strategy for many firm’s messaging. Research now points to a tide turning away from ESG.
The reason why? Supposedly 52% of IR professionals, consultants and boardroom executives globally cite ESG as “not important” for their investor audience.
This idea runs concurrently (or perhaps in the face of) the fact that a whopping 99% of S&P 50 companies are continuing to release sustainability reports. Then again, a separate fact shows that, while 40% of S&P 100 companies used the “ESG” term in 2023 for report titles, this has dramatically fallen to a mere 6% in 2025.
This may be indicative of a chasm opening further between a fund’s disclosure obligations and exactly what LPs actually want to hear about.
To potentially rectify that, half of IR teams have noted that they are injecting more focus towards in-person investor meetings: a metric also battling with the finding that a third of IR teams have no formal KPIs. Many are adopting AI as an outreach-augmentation tool too, despite digital screen-based outreach’s interests declining.
A lot of these IR findings are deducing that hedge funds and asset managers are in flux knowing which marketing strategies and marketing should be prioritised, trying out new techniques to appeal to investors’ shifting tastes.
So, what does this mean for fund marketers?
The perceived cooling of ESG unpopularity is the result of IR teams at large, tenured public companies. In response, this could open a gate for sustainability-minded hedge funds or asset managers that use ESG language as a differentiator for their pitch decks and DDQs.
Although such materials should be tested to see what’s still landing well for LPs, and not reading as ‘noise’ in the cluttered sustainability environment. For instance, if it’s used merely for brand positioning, rather than addressing something steeped in financials – capital allocation, governance, risk management – where it tends to perform best.
The increased AI help showcases time being given back to IRs to meet allocators, presumably to build more substantial and in-person relationships. Again, so long as the AI usage is actually improving outreach quality and not merely adding more clutter to a distribution campaign, then it may provide a competitive edge to IRs wanting to meet investors on matters they hold dear in shifting macroeconomic times.
