Despite its benefits, sustainable investing faces several challenges:
Data Availability: Reliable and consistent ESG data is often lacking, making it difficult to assess and compare companies' sustainability performance. Greenwashing: Some companies may exaggerate their ESG efforts, misleading investors about their true impact. Standardization: The lack of standardized ESG reporting frameworks can create confusion and inconsistency in evaluating investments. Performance Concerns: Some investors worry that focusing on ESG criteria might compromise financial returns, although research increasingly shows that sustainable investments can perform well.