Despite ESG integration in investments becoming more mainstream and ESG funds increasing in popularity, there are still concerns about a potential performance trade-off. There is research showing that consideration of material ESG factors has a positive effect on investment performance, but there is also research showing there isn't a clear link between firms' ESG attributes and performance.

In this report, we measure the performance of environmental, social, and governance-focused funds versus traditional peers in 17 European Morningstar Categories. We define ESG funds as funds that claim to focus on sustainability; impact; or environmental, social, and governance factors.