Written by Kevin Battal, Research Associate at The Vantage.


The Introduction


Environmental, Social, and Governance (ESG) and Socially Responsible Investing (SRI) frameworks have become important to the investment landscape. Positioned as tools to align financial performance with sustainable outcomes, these frameworks are now integral to how asset managers design portfolios—and how marketers communicate their value. However, the growing demand for ESG and SRI products has presented an ethical dilemma for marketers and media professionals: how to represent these funds in a way that is both compelling and evidence-based, yet also transparent and credible.


As regulatory scrutiny intensifies and investor expectations mature, the credibility of ESG and SRI marketing narratives is being questioned. This article critically examines the ethical and strategic tensions involved in promoting ESG and SRI funds, drawing on academic and institutional evidence to outline how marketing professionals can navigate this evolving space with integrity.


Trust, Transparency, and Greenwashing A Widening Gap


Despite their growing popularity, ESG and SRI funds are facing mounting concerns over misrepresentation. (Gehrig and Moreno, 2023) has noted that inconsistent disclosures and poorly defined ESG metrics decrease investor confidence. A high-profile investigation found that over €123 billion from funds labelled as “sustainable” under the EU’s Article 8 and 9 classifications were invested in companies expanding fossil fuel operations, challenging the substance behind their claims (Dubslaff et al, 2025).


Similar gaps have been documented in other studies. Abouarab et al. (2024) in the Journal of Business argue that many ESG-labelled funds demonstrate limited progress on core environmental metrics, such as carbon intensity, despite promotional language suggesting otherwise. This disconnect between marketing narratives and measurable outcomes raises a critical ethical issue for those involved in promoting ESG and SRI.


Yet, the pressure to differentiate in a competitive marketplace continues to incentivise overstatement. The dilemma for marketing professionals remains: how can one promote ESG and SRI funds without contributing to the concerns the frameworks aim to overcome?



Balancing Performance Messaging with Purpose


Another layer of complexity arises from the narrative surrounding ESG and SRI fund performance. Institutions such as Morgan Stanley (2025) have reported that ESG-aligned funds have, in many cases, outperformed traditional investment options—particularly in terms of volatility-adjusted returns. These findings offer valuable marketing leverage, reinforcing the idea that purpose and performance are not mutually exclusive.


Research from Capotă et al. 2022 indicates that ESG fund flows are less sensitive to short-term performance, implying that many investors are motivated more by ethical alignment than return maximisation. Gillan et al. (2021) further argue that while ESG investing may reduce downside risk, its long-term return profile often meets at a point with conventional investment strategies. This presents another dilemma: should marketing lead with performance metrics or mission-driven outcomes? Overemphasising returns may invite criticism if performance dips, while prioritising ethics without evidence can also erode credibility.



Criteria for Credibility


What defines a valid ESG or SRI Fund?


To communicate effectively, marketers must first understand the criteria of credible ESG and SRI funds. Eccles and Klimenko (2019) propose that robust funds are those that align with structured frameworks such as the Principles for Responsible Investment (PRI), the EU Sustainable Finance Disclosure Regulation (SFDR), and the EU Taxonomy. These frameworks provide methodologies for transparency, stakeholder accountability, and measurable impact.


Despite this, a study by the CFA Institute (2023) revealed that most ESG fund disclosures fail to provide decision-useful information. Meanwhile, Berg et al. (2022) demonstrate that ESG fund ratings often diverge substantially between rating agencies, undermining investors' ability to make informed comparisons.


In regions such as the Middle East and North Africa, these challenges are amplified. Tavares et al (2025) observe that ESG and SRI investment frameworks are still maturing across the Gulf Cooperation Council (GCC), with weak data and limited standardisation creating further barriers to trust. As such, messaging in these regions must prioritise transparency and education, rather than mimic Western ESG narratives.


Marketing in Practice: Failures and Effective Approaches


Case studies illustrate the gap between aspirational messaging and grounded communication. An article revealed that several ESG funds, despite marketing themselves as climate-aligned, failed to achieve measurable reductions in carbon exposure over time (Abouarab et al., 2024). This illustrates how even compliant funds may fail to meet the expectations set by their own campaigns.


Conversely, best practices are emerging. Nordea Asset Management, for instance, has been recognised for providing investors with real-time impact dashboards and third-party-audited ESG performance reports (Morningstar, 2025). Their approach supports marketers with credible, data-rich content that reinforces trust without relying on vague slogans.


The contrast is that successful ESG marketing builds its narrative on what can be demonstrated, not on what can be imagined.


Ethical Marketing Principles for ESG and SRI Funds


Drawing from academic and industry literature, five key principles emerge for ethical ESG and SRI marketing:

  1. Precision over persuasion: Avoid ambiguous claims; tie messages to specific metrics (OECD, 2024).
  2. Invest in education: Use accessible formats (infographics, FAQs) to build retail investor understanding (MSCI, 2025).
  3. Localise narratives: Tailor messaging to regional frameworks such as the UAE’s Net Zero 2050 policy (Masdar Institute, 2023).
  4. Reference external frameworks: Cite credible benchmarks like PRI, SFDR, and the EU Taxonomy (PRI, 2024).
  5. Practice radical transparency: Be upfront about fund limitations and verification status (Harvard Business Review, 2021).


These principles not only mitigate regulatory risk—they enhance long-term engagement and brand loyalty.


Conclusion and Key Takeaway


The marketing of ESG and SRI funds demands more than creative copywriting. It requires strategy, evidence, and ethical clarity. As investor scrutiny increases and regulatory frameworks mature, sustainability-focused campaigns must evolve beyond aspirational language to reflect demonstrable impact. The future of ESG and SRI marketing will be defined by truth-telling, not trend-following. For marketers, the most compelling message is not the one that sounds best—but the one that stands up to scrutiny.


Sources


  1. Abouarab et al. (2024). Spotting Portfolio Greenwashing in Environmental Funds. Journal of Business Ethics, 197. doi:https://doi.org/10.1007/s10551-024-05783-z.
  2. Berg, F et al. (2022) 'Aggregate confusion: The divergence of ESG ratings', Journal of Financial Economics, 145(3), pp. 545–565.
  3. Capotă, L.-D. et al. (2022). Are Ethical and Green Investment Funds More Resilient? SSRN Electronic Journal, 2747. doi:https://doi.org/10.2139/ssrn.4277189.
  4. CFA Institute (2023) Greenwashing Risks in Investment Fund Disclosures. Available at: https://rpc.cfainstitute.org.
  5. Dubslaff, J., Hauke, F. and Seizov, O. (2025). New NGO Research Uncovers Massive Greenwashing in European ESG Funds | Urgewald e.V. [online] Urgewald.org. Available at: https://www.urgewald.org/en/medien/esg-funds-greenwashing-eu?utm.
  6. Eccles, R.G. and Klimenko, S. (2019) 'The Investor Revolution', Harvard Business Review, May.
  7. Gehrig, N. and Moreno, A. (2023). An Exploration of Greenwashing Risks in Investment Fund Disclosures: an Investor Perspective. rpc.cfainstitute.org. doi:https://doi.org/10.56227/23.1.19.
  8. Gillan, S., Koch, A. and Starks, L. (2021) 'Firms and Social Responsibility: A Review', Journal of Financial Economics, 141(1), pp. 60–97. Available at: https://doi.org/10.1016/j.jfineco.2021.05.003