Interest rate rise

The Federal Reserve raised interest rates again on May 3, 2023, by a quarter point, making it the Fed’s 10th rate hike since March 2022 in an ongoing fight to tame inflation. These rate hikes have been reverberating through the economy, raising prospects of a recession amid heightened concerns about the fragile state of banks. The rate hikes are also rattling sustainability-focused investing, better known as ESG investing. The trend toward ESG investing, which puts pressure on companies to meet environmental, social and governance benchmarks, has almost redefined asset management over the past decade. ESG funds today are a multitrillion-dollar market. However, the high uncertainty around interest rates today, along with the prospects of a looming recession and a political backlash, has put the future of ESG investors at a crossroads. I specialize in sustainable finance, and my recent work has documented the impact that tough economic times can have on ESG investing dema...