Global sustainable funds saw $84 billion in net outflows in 2025, a sharp reversal from a $38 billion inflow in 2024, even as surveys show near-universal interest in sustainable investing among younger generations. A 2025 Morgan Stanley survey found that 99% of Gen Z investors with over $100,000 in investable assets claim interest in sustainable investing, yet money moved quickly out of ESG funds when markets became uncertain. Morningstar data shows the $84 billion outflow contrasts with a $1.7 trillion inflow into the global open-end fund and ETF universe, and while 2025 was the first year of outflows in Europe and the rest of the world, it marked the third consecutive year of outflows in the US. Analysts at GlobalData link the decline to a challenging market and shifting investor priorities, with cost-of-living pressures and expectations of ESG underperformance deterring young investors from committing funds. Despite this, 86% of asset owners globally expect sustainable allocations to rise over the next two years, betting that the 2025 downturn was temporary and that wealth transfers from Baby Boomers will eventually boost ESG investing.