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Socially responsible investing booms on investment platforms

  • Writer: Derry Thornalley
    Derry Thornalley
  • Jul 30
  • 4 min read

A Shift from Pure Profit to Purposeful Portfolios

Traditionally, investing was all about returns. But in today’s world, profit no longer stands alone. Environmental, Social, and Governance (ESG) considerations have transformed investing into a platform for positive change. Individuals and institutions alike are adopting responsible investing—not just as a trend, but as a core philosophy reshaping capital markets.


The Rise of Responsible Investing

What It Means Today

Responsible investing (RI), often known as sustainable, impact, or ESG investing, now encompasses far more than ethical screening. It’s a data-backed, results-oriented investment approach that evaluates companies on long-term value creation, risk mitigation, and their societal footprint.


Why the Shift?

Issues like climate change, gender inequality, income disparity, and corporate governance failures have taken center stage. Investors, particularly millennials and Gen Z, are demanding that their capital reflect their values. Simultaneously, global regulatory shifts, such as Europe’s SFDR mandates and increasing ESG disclosure rules in the U.S. and Asia, have made ESG integration less optional and more operational.


Investment Platforms: Catalysts for Change

Platforms like Veri, Betterment, Schroders Personal Wealth, and BlackRock’s Aladdin have democratized responsible investing, making it easier than ever for retail and institutional investors to access ESG-aligned opportunities.


ESG Investing

What’s Changed in 2025?

  • AI-Driven Personalisation: Investment platforms now offer custom ESG screens powered by real-time data, enabling investors to reflect their unique values—be it climate action, women-led enterprises, or indigenous economic empowerment.

  • Tokenized ESG Assets: Platforms have begun offering fractional access to impact assets like green bonds or regenerative agriculture projects via blockchain tokenization, improving liquidity and accessibility.

  • Sustainability-Linked Portfolios: Investors can select portfolios with explicit SDG (Sustainable Development Goal) alignment, tracked and reported using dynamic dashboards.


The Numbers Behind the Movement

The global ESG asset pool crossed $57 trillion in H1 2025, accounting for nearly 41% of total assets under management, according to the Global Sustainable Investment Alliance (GSIA). Growth is being driven by:

  • Institutional mandates (pensions and sovereign wealth funds)

  • Green transition legislation

  • Increased demand for climate-resilient portfolios

  • Greater transparency and reporting frameworks (e.g. ISSB, TCFD, GRI, and TNFD)


Financial Returns Remain Competitive

A 2025 MSCI ESG Global Performance Report shows that ESG-screened portfolios outperformed traditional benchmarks in 8 out of the last 10 quarters, largely due to climate resilience, lower regulatory risk, and stronger stakeholder management.


ESG Metrics and Standardisation: 2025 Landscape

While 2022–2024 saw a flurry of frameworks, 2025 marks a turning point:

  • The International Sustainability Standards Board (ISSB) has unified major global ESG reporting under a single framework.

  • Double materiality—financial + social/environmental impact—is now a baseline expectation.

  • AI auditing tools are assisting investors and regulators in real-time ESG risk analysis.


The Power of Engagement

In 2025, investors aren't just watching companies—they’re shaping them. From pension funds to retail investors, proxy voting and shareholder activism are driving board diversity, climate disclosures, and executive accountability.


Aligning with the SDGs

Responsible investing in 2025 has increasingly aligned with the UN SDGs. Investment platforms now allow users to track their portfolio impact on specific goals—like SDG 13 (Climate Action) or SDG 5 (Gender Equality)—in real-time.


Notably, impact investing now represents over $1.5 trillion AUM, with significant flows into:

  • Affordable housing (SDG 11)

  • Renewable energy (SDG 7)

  • Digital inclusion and education (SDG 4 & 9)


ESG and Risk Management

With extreme weather, supply chain volatility, and regulatory scrutiny rising, ESG integration is no longer a 'nice-to-have'—it's a risk imperative. Companies with poor ESG scores faced a 19% higher volatility in share price over the past 12 months.


Challenges Still Present

While momentum is strong, responsible investing faces hurdles:

  1. Greenwashing remains a concern, prompting regulators to crack down on misleading ESG claims.

  2. Inconsistent Ratings – Major ESG rating providers still diverge significantly, creating confusion.

  3. Limited Data in Emerging Markets – Africa and Southeast Asia lag in ESG reporting, although improving.

Technology Is Accelerating ESG


What’s New in 2025:

  • AI identifies ESG-related controversies in real-time using multilingual news and social media scanning.

  • Blockchain is being used to track ESG claims across supply chains.

  • Open APIs allow platforms to integrate third-party ESG data providers, creating more dynamic, personalised user dashboards.


The Role of Financial Advisers

Advisers have moved from product pickers to impact navigators. In 2025, advisers:

  • Use ESG discovery tools to identify client values

  • Incorporate ESG risk into client suitability tests

  • Offer impact dashboards to track non-financial outcomes

  • Leverage platforms like Veri to offer risk-rated, ESG-compliant model portfolios


Global Trends

  • Europe: Mandatory ESG disclosures under SFDR and EU Taxonomy continue to shape global standards.

  • Asia: Rapid ESG adoption led by Japan’s GPIF and China’s green finance mandates.

  • Africa: ESG integration in pensions is rising, with Mauritius, Kenya, and South Africa leading regulatory frameworks.

  • North America: The SEC is finalising its Climate Risk Disclosure Rule, which will be mandatory from Q4 2025.


What’s Next?

The next phase of responsible investing is likely to focus on:

  • Biodiversity (with TNFD becoming mainstream)

  • Just Transition strategies (balancing social equity and climate goals)

  • Real-time impact measurement through IoT and AI

  • Community investing through localised crowdfunding ESG platforms


2025 marks a pivotal moment where responsible investing has become a core part of mainstream finance. Platforms, regulation, investor sentiment, and technology have converged to make ethical, sustainable investing accessible and effective.


Investors now have the tools not only to grow wealth but to influence change—measurably, transparently, and responsibly.


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