15. ESG Challenges

When we began teaching sustainable finance at Marquette University more than a decade ago, environmental, social, and governance (ESG) investing and socially responsible investing were still backwaters. A lot, as we talked about in the last chapter, has changed even over the recent years. However, the increasing adoption and application of these types of investing criteria conceal some underlying challenges. Despite the rapid growth of ESG funds across several measures, we still see four main obstacles to ESG investing’s continuing emergence. In this chapter we outline these challenges and chart the progress toward potential solutions.