- Net flows: Over Q2, sustainable funds outflows of £215m (-£28m ex-MMFs) were lower than that of their conventional peers (-£10.31bn total, -£9.85bn ex-MMFs).
- Equities: Sustainable equity funds rebounded from their first ever quarterly redemptions in Q1, attracting £491m in Q2.
- Equity US was the most popular sustainable classification, attracting £1.5bn—26.4% of the total.
- Active v Passive: Passive equity strategies suffered their second consecutive quarter of outflows (Q2 -£1.19bn) as active equities netted £1.68bn.
- SDR: Net aggregate redemptions to SDR funds over H1 were £2.11bn, an increase from Q1’s outflows of £783m
Sustainable Assets and Flows by Asset Class
Chart 1: Sustainable Asset Class AUM, 2015 to Q2 2025 (£bn)
Source: LSEG Lipper
UK sustainable assets held in mutual funds and ETFs fell from £2.36bn to £2.3bn (98.77% of their FY 2024 value) since the start of the year, while total UK mutual fund and ETF assets fell to 97.3%.
Sustainable assets, as defined by Lipper, make up 9.97% of the UK mutual fund and ETF market, as compared to 9.84% at the end of 2024.
Since 2019, sustainable assets have grown 514%, while conventional UK fund assets in have risen from £1.92trn to £2.07trn, or by 110%.
Equity funds make up most sustainable assets, at 71.85%, down from 72.24% in 2024, followed by bond (13.65%, down from 13.75%), mixed assets (12.62%, up from 12.24%), and MMFs (1.25%, up from 1.17%). Alternatives and real estate funds make up less than 0.5% each of sustainable assets.
Equities have taken a greater market share since 2019, particularly at the expense of mixed assets, then bonds. However, all have grown considerably in absolute terms.
Chart 2: Five-year quarterly flows, to Q2 2025 (£bn)
Source: LSEG Lipper
Sustainable flows posted their second consecutive negative quarter (-£215m), albeit recovering somewhat for Q1 2025 (-£439m). Bonds fared worst (-£488m), dropping considerably from Q1, followed by MMFs (-£187m), mixed assets (-£45m), and alternatives funds (-£16m).
However, sustainable equity funds rebounded from their first ever quarterly redemptions in Q1, attracting £491m in Q2. Nevertheless, this is still the second lowest inflows for the asset class, with only Q3 2022 (£211m) showing a smaller net inflow. Sustainable real estate attracted £30m for the quarter.
Sustainable versus Conventional Flows by Asset Class
Chart 3: Asset Class Flows, ESG v Conventional, Q2 2025 (£bn)
Source: LSEG Lipper
Over Q2 2025, sustainable funds outflows of £215m (-£28m ex-MMFs) were exceeded by that of their conventional peers (-£10.31bn total, -£9.85bn ex-MMFs).
As stated above, sustainable equity funds rebounded from their first negative quarter in Q1 to take £495m, while their conventional peers attracted £4.15bn. Real estate followed, taking £30m, despite £308m outflows for their conventional peers.
Negative sustainable flows for other asset classes were in the same direction as their conventional peers, with no sustainable asset class making up more than 5% of the outflows for the asset class as a whole—the largest being sustainable bonds, with 4.7% of outflows for the asset class.
Chart 4: Asset Class Flows, ESG v Conventional, YTD 2025 (£bn)
Source: LSEG Lipper
Responsible investment funds saw outflows of £654m YTD (-£270m ex-MMFs). This compares to outflows of £6.44bn (-£7.28bn ex-MMFs).
MMFs’ £137m inflows were in line with the £6.94bn for the asset class’s conventional flows for the period, while sustainable mixed assets netted £127m despite the £6.44bn redemptions for conventional mixed assets over H1. Likewise, sustainable real estate bucked the trend of £635m outflows for conventional funds, taking (an albeit modest) £53m.
On the debit side of the ledger, sustainable alternatives shed £44m (-£316m conventional) and sustainable bond suffered outflows of £490m
(-£8.1bn conventional).
Sustainable equity’s reversal of fortune in Q2 wasn’t enough to turn net flows positive over H1. While these funds saw outflows of £437m, their conventional peers netted £1.48bn over the first half of the year.
Sustainable Flows by Classification
Largest positive flows
Chart 5: Largest Positive Sustainable Flows by LSEG Lipper Global Classification, Q2 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
Equity US was the most popular sustainable classification, attracting £1.5bn: at 26.4% of the total, an improvement on the previous quarter, if down on FY 2024. Overall, US large caps have benefited from the rally from early April, as markets recovered from the initial tariff shock.
This was followed by Equity Emerging Markets Global (£884m) despite headwinds for the classification’s conventional funds.
Mixed Asset GBP Conservative is the only non-equity classification in the top six (£236m).
Equity Global has been pushed down the rankings on the back of the US recovery (£114m versus £4.36bn conventional), although it’s interesting to see Equity Global Income (£90m) and Equity Japan (£74m) make a dent in the figures despite conventional outflows for the latter (as is also the case for Equity Asia Pacific ex-Japan).
Chart 6: Largest Positive Sustainable Flows by LSEG Lipper Global Classification, YTD 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
As was the case in Q2, Equity US funds were the most popular sustainable classification over H1 (£1.49bn). However, they make up a much smaller proportion of the flows as a whole than over 2024, with 14.7% of the total of £10.19bn.
Equity Global followed, at some distance, netting £878m (£8.23bn conventional), then Equity Emerging Markets Global, which attracted £780m despite redemptions of £485m for conventional equivalents.
Mixed Asset GBP Conservative (£766m) and Bond Global Corporates USD (£340) were the leading non-equity classifications despite outflows of £1.94bn for the latter’s conventional peers.
Largest negative flows
Chart 7: Largest Negative Sustainable Flows by LSEG Lipper Global Classification, Q2 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
Equity Sector Real Estate Global saw the worst outflows in Q2 (-£1.04bn, see column to right), followed by Equity UK (-£940m versus -£3.22bn conventional) as large UK money managers continue to downgrade their UK equity exposure despite attractive market valuations.
Bond Global USD (-£315m versus inflows of £2.48bn for conventional funds) and Bond Global Corporates LC (-£252m versus -£6.08bn conventional).
Mixed Asset GBP Balanced suffered £222m outflows (-£144m conventional) despite the positive fortunes of its Conservative sibling.
Chart 8: Largest Negative Sustainable Flows by LSEG Lipper Global Classification, YTD 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
While direct property has done (modestly) well, the largest outflows were again from Equity Sector Real Estate Global funds (-£2.13bn versus -£255m conventional). This was the result of large redemptions from a single index-tracking fund.
Equity UK continues to suffer in line with the classification as a whole (-£1.24bn versus -£7.56bn conventional).
Bond Global Corporates LC follow, in line with redemptions from the wider classification (-£713m versus -£7.56bn conventional). Equity Theme – Alternative Energy continues to feel the pain
(-£447m) as, like Equity Theme – Infrastructure
(-£97m), higher rates pulled the rug from under performance. The pullback from US government support for these areas is likely also dissuading investors.
Active versus Passive
Chart 9: Sustainable Bond (LHS) and Equity (RHS) Active v Passive Asset Class Flows,
10 Quarters to Q2 2025 (£bn)
Source: LSEG Lipper
Passive bond funds stayed in positive territory by a £14m whisper despite £505m outflows from active bond strategies. H1 bond flows are passive (-£19m), active (-£471m).
Passive equity strategies suffered their second consecutive quarter of outflows, accelerating from the previous quarter (Q2, -£1.19bn; H1 -£1.27bn). Meanwhile, active equities rebounded from their Q1 outflows to net £1.68bn in Q2 (H1 £830m).
Flows by Asset Manager
Chart 10: Largest Positive ESG Flows by Promoter, YTD 2025 (£bn)
Source: LSEG Lipper
BlackRock tops the table over H1 (£1.14bn), with £1.1bn of sustainable equity and £762m of mixed assets despite £721m of bond redemptions. It is the top-selling asset manager for equity and mixed assets.
Legal & General (£718m) was also the top-selling manager of sustainable bond funds over the period (£203m) and HSBC (£641m) dominated in MMFs (£136m).
There is little activity among the top sellers in alternatives or real estate other than Aviva’s £66m in the latter.
SDR: AUM and Flows
Chart 11: SDR Categories AUM YTD 2025 (£bn)
Source: LSEG Lipper
LSEG Lipper records £27.25bn of assets in these funds, slightly down on Q1’s £27.33bn; Sustainability Focus, £22.35bn (82%); Sustainability Impact, £2.9bn (10.7%); Sustainability Improvers, £1.08bn (4%); and Sustainability Mixed Goals, £0.92bn (3.4%).
Chart 12: SDR Categories Net Flows by Asset Class, YTD 2025 (£m)
Source: LSEG Lipper
Net aggregate redemptions to SDR funds over H1 were £2.11bn, an increase from Q1’s outflows of £783m. Sustainability Focus funds suffered worst, with outflows of £1.76bn (bonds -£61m; equity -£1.29m; mixed assets -£409m).
Sustainability Impact funds saw net outflows of £451m (bonds +£0m; equity -£447m; and real estate -£13m).
Sustainability Improvers saw a slight improvement on the previous quarter, with redemptions of £22m (equity +£27m; mixed assets -£49m).
Sustainability Mixed Goals was the only classification to see net inflows, of £117m, all to mixed-assets funds.
