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Is ESG Still Driving Investment?

Written By

Dan Buckley

Written By

Dan Buckley

Dan Buckley is an US-based trader, consultant, and part-time writer with a background in macroeconomics and mathematical finance. His expert insights for DayTrading.com have been featured in multiple respected media outlets, including Yahoo Finance, AOL and GOBankingRates. As a writer, his goal is to explain trading and finance concepts in levels of detail that could appeal to a range of audiences, from novice traders to those with more experienced backgrounds.

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Updated

Jul 21, 2025

Is ESG still a priority for investors? Interest in sustainable investing is growing globally, yet shifting trends in the US and concerns over weak metrics in sectors like apparel are reshaping the conversation.

Below, I break down how ESG strategies are evolving, where investor focus is shifting, and what it means for the future of sustainable investment.

Are Investors Considering ESG Today?

Investor interest in ESG has grown, with ESG assets projected to reach $33.9 trillion by 2026.

But US markets have seen recent outflows due to political backlash and shifting sentiment.

What’s Driving The Change?

This shift is driven by stronger EU regulations, growing consumer demand for ethical brands, increased climate risk awareness, and investor belief that ESG alignment supports long-term returns.

More investors are seeing ESG as not a trade-off, but as an additional dimension of investment analysis.

What Environmental Risks Are Investors Most Concerned About Today?

In terms of apparel specifically, investors are focused on emissions, water usage, textile waste, and climate-related supply chain disruptions, especially in high-risk regions like Bangladesh and drought-prone cotton zones.

How Is The Impact Of The Trump Administration’s Stance On Climate Affecting Investments?

It’s led to reduced US fund inflows, more cautious corporate disclosures (“greenhushing”), and deeper polarization around sustainable investing.

Are The Proposed ESG Policies As They Relate To Textiles And Apparel Enough To Make The Sector Attractive To Investors?

Policy momentum and market growth are promising. But weak performance metrics and limited circularity progress still deter many investors, though science-based brands are gaining traction.

How Can The Industry Boost Investments In Circularity?

The industry can better unlock value by scaling recycling infrastructure, adopting EPR mandates, offering green finance pathways, and forming cross-sector alliances to help de-risk investments and improve material traceability.