TreasurySpring reveals sharp decline in ESG’s role in cash investing

Corporate enthusiasm for ESG investment appears to be waning, according to TreasurySpring’s latest sustainable finance survey, conducted in collaboration with the London Stock Exchange (LSE) and The Association of Corporate Treasurers (ACT).

Now in its third year, the global survey captures insights from corporate treasurers managing an estimated £80bn in cash holdings. The 2024 report identifies a marked shift in corporate ESG strategies—from broad ambition to a more focused, risk-conscious approach. Economic uncertainty, regulatory pressures, and reputational risks are all prompting companies to reassess how ESG fits into their broader financial frameworks.

A key takeaway from this year’s findings is the drop in institutional investment in ESG products. The proportion of organisations not currently invested in these products has jumped to 55%, up sharply from 32% in 2023. Likewise, ESG’s influence over corporate cash investing has continued to fall, declining from 63% in 2022 to just 30% in 2024.

However, the influence of ESG considerations in supply chain management is rising. The proportion of respondents citing ESG as a factor in this area increased to 47% this year, up from 35% in 2023. This suggests that while cash allocations are being handled more conservatively, companies are still under pressure to demonstrate ESG awareness and responsibility—particularly in light of evolving regulations and heightened scrutiny from stakeholders.

Risk perceptions around ESG are also changing. Greenwashing remains a top concern, but the proportion of respondents identifying it as a major issue has dropped to 44% in 2024 from a peak of 69% in 2022. This decline may indicate a more nuanced understanding of ESG-related risks, as well as improved internal controls and reporting frameworks.

TreasurySpring head of corporate origination Nigel Owen said, “The fluctuating influence of ESG in determining cash investment strategies is something our clients speak to us about regularly. Our latest report shows signs that ESG investment is undergoing something of a retrenchment – but not an outright rejection. While ESG adoption may be slowing, the commitment to sustainable finance is maturing. Companies are moving beyond broad ambitions toward more focused, credible approaches, prioritising operational impact, investor alignment, and measurable results. The challenge now is delivering on that commitment with the practical constraints of today’s world.”

LSE senior manager for fixed income, primary markets, Sam Dodd said, “Both companies and investors continue to refine their sustainability strategies, focussing on driving long-term value by managing financially quantifiable sustainability-related risks and opportunities. As strategies evolve, effective sustainability reporting and enhanced transparency may enable more effective engagement with investors.”

As ESG strategies become more measured and disciplined, TreasurySpring continues to position itself as a key partner for corporates navigating the evolving sustainable finance landscape.

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