To Sidestep ‘Weaponized’ ESG, Do-Good Funds Embrace a New Label

Fund managers have grown weary of the growing political scorn aimed at the environmental, social and governance label. So many have decided to call their funds something else.

Thematic exchange-traded funds – ones that focus on stocks around a particular subject – have taken over as the most common way to launch products in areas like clean energy or gender diversity. According to a report by RBC Capital Markets, 56% of sustainable fund debuts so far in 2023 have been labeled thematic rather than ESG. This follows a similar breakdown seen last year, writes RBC’s Sara Mahaffy.

How toxic ...