ESG Survey 2026: the shift towards more pragmatic ESG integration

Over the past two years, ESG has become a more contested topic across the investment industry. Public debate has intensified, regulatory expectations have shifted in several markets and many asset managers and asset owners have become more cautious in how they communicate about ESG.

Against this backdrop, we wanted to understand whether the ESG backlash has translated into tangible changes in investment practices – or has mainly changed the way ESG is communicated.

Since 2015, LGT Capital Partners has periodically conducted surveys of investors in alternative assets to understand how ESG adoption, motivations and investment practices are changing. This fifth survey builds on that earlier work while focusing specifically on how the more contested ESG environment of the past two years has affected investment practices.

Conducted among 191 asset managers and asset owners across different regions and asset classes, the ESG Survey 2026 examines changes in ESG sentiment, commitments, terminology, resources, exclusions and investment priorities.

The survey base

The survey sample consists predominantly of asset managers and asset owners across different regions and asset classes. Respondents are headquartered mainly in Europe and the US, with additional participation from Asia-Pacific and other regions.

Sentiment has shifted but commitments have remained largely stable

Around two-thirds of respondents say market sentiment around ESG in their primary region has become more negative over the past 24 months. Yet 92% maintained or increased their ESG commitments, while only 8% reduced them.

For most respondents, the importance of ESG in investment decision-making has also remained stable and is expected to remain stable over the next year.

ESG commitments and market sentiment

ESG language is adapting to regional expectations

Regional differences are most visible in how ESG is communicated, while changes in underlying commitments are more limited.

US

Almost half of US respondents say they have changed their ESG-related terminology over the past 24 months. Changes in commitments have been considerably more limited.

Europe

At 28%, European respondents were the most likely to report an increase in ESG commitments. At the same time, Europe also had the highest share reporting a reduction in commitments, at 9%. While 23% changed their ESG-related terminology, the shift in language was considerably less pronounced than in the US.

Asia-Pacific

Changes in terminology were less pronounced, while 27% reported increased commitments. Given the smaller sample, these findings should be interpreted directionally.

Respondents reporting changes to ESG-related terminology

Different forces are shaping commitments and language

Changes in ESG commitments are more often linked to investor preferences and regulatory requirements, while political sentiment appears to influence how ESG is described and positioned more visibly.

Reasons for ESG-related changes

ESG resources remain resilient

ESG teams and spending have generally held steady or increased. Headcount and spending provide an indication of whether ESG remains embedded operationally – and the survey results suggest that it does.

Changes in ESG teams and spending

A group of recalibrators is emerging

34% of respondents are recalibrators. They continue to integrate ESG but are reassessing where it is most relevant, how strongly it should influence investment decisions and how it should be communicated.

Compared with higher-conviction respondents, recalibrators place greater emphasis on financial materiality, credible data, client requirements and strategy-specific implementation.

ESG archetypes

Rather than stepping away from ESG, a sizeable part of the market is refining how ESG is prioritized, applied and communicated.

Exclusions continue to be applied, with defense as the changing topic

The exclusion data does not point to a general easing of ESG boundaries. Across most categories, exclusions have been applied with the same rigor as before or have become stricter. Defense-related investments are the clear exception.

23% of respondents say they are now less strict on defense-related investments, compared with only 3% that have become stricter.

Changes to ESG exclusions

How our approach to defense-related investments is evolving

Given the changing geopolitical environment, changes in investor preferences and increased deal flow, LGT Capital Partners established a more formalized firm-wide defense investment framework and governance process.

The framework enables a consistent, case-by-case assessment, while our existing exclusions, including controversial weapons, remain unchanged.

Defense-related investment policies by headquarters region