British investors pulled more than £500million out of woke funds last month.
Industry figures show withdrawals hit £524million in November amid a backlash over environmental, social and governance (ESG) investing.
It was the seventh month of outflows in a row and took total withdrawals in that period to almost £3.7billion.
Funds network Calastone, which compiled the report, said: ‘Investors appear increasingly sceptical about ESG funds.’
Critics of ESG investing say it prioritises social goals over making money for investors.
Withdrawals: Industry figures show withdrawals hit £524m in November amid a backlash over environmental, social and governance investing
It also is not clear how sustainable some so-called ethical funds really are, with the sector facing a backlash for ‘greenwashing’.
November’s outflows came after ESG equity funds suffered their second worst month on record in October with withdrawals of £700million.
Britons sold down £304million of ESG funds in May, £369million in June, £330million in July, a record £953million in August and £485million in September.
Calastone head of global markets Edward Glyn said: ‘The Financial Conduct Authority [FCA] is taking action to counter allegations of greenwashing in the ESG sector, but investors are way ahead of them.
‘The FCA’s action is likely to cast a further pall over the sector in the months ahead, however, and we will be monitoring the extent to which fund flows react.’
Laith Khalaf, head of investment analysis at AJ Bell, said ‘it feels like the ESG party is running out of steam’.
He added: ‘The cost-of-living crisis has shifted the ESG debate somewhat. Energy security and price are now back in the game competing with green priorities.
‘It’s also become increasingly clear how murky and nuanced some environmental questions can be. Inflationary pressures have also put pressure on savers and investors and so inflows are more difficult to come by across the board.’
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