ESG Funds: History, Performance, and Their Role in Achieving Environmental Sustainability

Koray Sayili

Chapter 3 in Climate Finance & Accountability:A Comprehensive and Holistic Approach, 2026, pp 73-99 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Since the first mention of ESG in 2005 by a United Nations initiative, ESG investing has grown significantly, driven by global commitments, such as the Paris Agreement of 2015. This chapter explores the rise of ESG-conscious investments, focusing on the development of ESG-based funds and their increasing prevalence in the financial markets. It emphasizes the growing demand for ESG funds as a tool to drive corporate environmental responsibility, suggesting that ESG investing will play a critical role in shaping corporate behavior and influencing future regulatory changes. Further research is necessary to understand the long-term financial and social impacts of ESG investing and its broader implications for corporate sustainability.

Keywords: Climate Finance; Environmental; Social; and Governance (ESG); Climate-Related Financial Disclosures; TCFD (Task Force on Climate-Related Financial Disclosures); Corporate Sustainability; Financial Risk Management; Sustainable Investing; Climate Risk Reporting; Corporate Environmental Accountability; Regulatory Frameworks; Capital Markets and Climate Risk; Carbon Transition Risk; Physical Climate Risk; Financial Disclosure Regulation; Responsible Investment (search for similar items in EconPapers)
JEL-codes: G32 M14 Q54 Q56 (search for similar items in EconPapers)
Date: 2026
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