Asia ex-Japan ESG funds return -20.1% in 2022, lagging broader market

ENVIRONMENTAL, social and governance (ESG) funds in Asia excluding Japan underperformed in 2022, and market watchers expect the macroeconomic uncertainties that plagued the sustainability space to persist in the year ahead.

Data from Morningstar showed that ESG Asia ex-Japan funds lost 20.1 per cent in 2022, underperforming non-ESG funds, which had an average negative return of 13.6 per cent.

Even the best performing funds in Asia ex-Japan saw positive returns in the single digit, while the worst ones were down by at least 40 per cent.