Environmental social and governance (ESG) investing has come to the fore in recent years, being put at the heart of investment mandates in many cases.

However, despite the rise in ESG investing, Debbie Fuhr, managing director of ETF consultancy ETFGI, said in a statement: “Confusion persists around what constitutes an ESG fund. According to PRI, a UN-supported initiative which seeks to understand the investment implications of ESG issues, 56% of adopters believe there is a lack of clarity in ESG definitions.”

The consultancy reported that assets invested in ESG ETFs listed globally had hit a new record of $47.33 billion at the end of September this year. During the month the products enjoyed inflows of $2.8 billion, which equates to a 7.8 percent increase in the total assets held in these vehicles.

ETFGI also found that Europe leads with the most ESG classified products available, followed by the US and Asia Pacific ex-Japan.

Since the launch of the first ESG ETF in 2002, the iShares MSCI USA ESG Select ETF, the number and diversity of products has increased steadily, with 253 ESG ETFs listed globally at the end of September 2019. In September, five new ESG ETFs were launched.

Despite some confusion over what actually constitutes ESG ETFGI’s classification system has attempted to remedy this by putting ETFs listed globally organised into categories, including core ESG products and theme-based groups, such as Clean/Alternative Energies and Gender Diversity.

For large institutional investors, companies such as eVestment provide datasets from their clients to match individuals classification with asset managers. Therefore it may be that ESG is not ‘one size fits all’ but more nuanced and means different things to different investors.