Environmental, Social and Governance (ESG) funds lost billions in the third quarter as demand among investors plummeted, according to Morningstar. Investment funds focused on sustainability goals have lost $2.7 billion in the third quarter of 2023 and they have been closing faster than they are opening during the same period, according to Morningstar. U.S. funds experienced withdrawals overall, but ESG funds experienced a significantly worse decline than their counterparts, facing four straight quarters of outflows as investors have lost interest due to regulatory scrutiny and concerns about returns.