Once a ubiquitous label, "sustainable investment" has seen a significant decline. Banks and asset managers, who heavily promoted ESG products, have grown suspiciously quiet since the early 2020s. While political shifts like "Trump 2.0" are cited, the trend also faltered due to overpromising, underperformance compared to non-green energy and AI, and a potential under-investment in defense.

Demand for dedicated sustainable products has waned, with Morningstar reporting $84bn in outflows from sustainable funds last year, a stark contrast to previous inflows. However, a caveat exists: outflows from retail products may not signify a complete abandonment of sustainable strategies, as some investors shift to bespoke portfolios.

A potential revival may be emerging, particularly in Europe. While the US has seen consistent outflows, European asset manager Amundi reported record inflows into ESG funds in 2026, suggesting a regional resilience. The obvious case for green energy investment, exacerbated by recent global events, and observable climate impacts in Europe could be driving this resurgence. Even major institutions like the Bank of England now identify climate change as a key driver of global government borrowing, alongside defense and demographics, indicating a broader, albeit indirect, investor awareness.