Greenwashing, performance ‘lowest barriers to ESG investing for asset

Greenwashing has dropped down the list of barriers to ESG investment for asset owners, according to a survey by FTSE Russell.  

Last year, more than a third of asset owners (37 percent) polled by the London Stock Exchange Group’s index arm cited concerns over potential reputational risks linked to greenwashing as a barrier to sustainable investing, making it the top obstacle at the time. 

This year, just 22 percent identified it as a concern. Only financial performance scored lower, being cited as a barrier to sustainable investment by 19 percent of asset owner respondents. 

FTSE Russell’s findings on financial performance contrast with those in Morningstar’s asset owner poll, which came out last week. The US data and index provider reported that 51 percent of asset owners surveyed saw impact on returns as a barrier to ESG adoption. 

Top among asset owner concerns in the annual FTSE Russell poll – which covered 402 asset owners across 24 countries – were the “quality or consistency of corporate reporting and disclosures”. A third of asset owners cited it as an issue, slightly up on 31 percent last year. 

FTSE Russell’s survey also revealed that investor patience with high-carbon assets is waning, with the proportion favouring divestment jumping from 21 percent in 2025 to 30 percent in 2026. 

This coincided with a drop in those supporting engagement with high-emitters, which fell from 67 percent last year to 60 percent in 2026. 

The poll also suggested that adoption of sustainable investing has returned to pre-2022 levels. Eighty-four percent of respondents said they were implementing sustainability considerations in their investment strategy in one form or another – an 11 percentage point increase since 2024. 

Climate risk was also found to be a growing area of worry among investors, with a quarter ranking their concern as 10 out of 10, up from 11 percent in 2025. More than half (52 percent) said they are considering climate risk in their strategic asset allocation processes, compared with 36 percent in 2025