Investors pulled 20.5 billion euros ($21.7 billion) from funds in the European Union's lower sustainability classification, while net inflows into the higher classification were their lowest since early 2021, the Morningstar report said.
U.S sustainability funds are also struggling.
Morningstar data on Tuesday showed managers closing funds faster than they opened new ones in the third quarter.
Investors exited U.S. funds in general in the period but sustainable funds fared worse, registering their fourth consecutive quarter of outflows.
In Europe, ESG funds launches totalled 126 in the third quarter, down 31% from the second quarter, Morningstar said.
Persons:
Morningstar, Tommy Reggiori Wilkes, David Evans
Organizations:
Investors, Investment, Sustainable, Morningstar, Thomson
Locations:
outflows, Europe, U.S