Red flags appearing over green investment funds as value bubble looks fit to burst

Stocks in many socially responsible and environmental investment funds are trading at frothy price-to-earnings multiples, prompting fears of a crash

Fears are rising over a potential crash in the value of socially responsible and environmental investment funds.

It’s reality-check time for environmentally and socially-responsible investment funds.

Exchange-traded funds investing in companies with responsible environmental, social and corporate governance – or ESG – practices lured a record $85bn (€70bn) in the US and Europe in 2020, and are still raking it in.