Just 7% of thematic funds incorporate ESG criteria, research suggests

Energy transition funds show highest carbon intensity, according to MSCI

The majority of global thematic funds have no ESG policies in place, while most funds in the universe focus on the energy transition, broad-based and technology themes, research by MSCI has found.

While thematic funds have seen strong inflows over the past four years - with assets quadrupling from less than $150bn in 2017 to over $600bn as of August 2021 - only 7% are estimated to be incorporating ESG in stock selection or index construction, according to the index provider. Thematic funds investing in the energy transition, broad-based and technology themes collectively account for over $180bn - or 30% - of overall thematic assets. According to Rumi Mahmood, senior associate of ESG fund research and author of the report, energy transition, resource management and cloud computi...