ESG Thematic ETFs Take the Lead: Climate, Tech and Scale Drive 2025 Flows

ESG-aligned thematic ETFs were a major force behind the sharp rebound in global thematic investing in 2025. Assets in thematic ETFs rose nearly 50% year-to-date, reaching $468bn by end-November, up from $313bn at the end of 2024 (ETFGI). Beneath the headline growth, the composition of flows tells a clear story: climate transition and sustainability-linked technology themes are doing the heavy lifting.

Climate and environmental strategies often combined with clean energy, electrification, and decarbonisation infrastructure alongside technology themes together now account for almost half of total thematic ETF assets and inflows. Healthcare followed as a secondary ESG-adjacent beneficiary, while resource management was the only thematic segment to see net outflows in November, highlighting investor selectivity rather than broad ESG fatigue.

Scale is increasingly decisive. iShares dominates ESG and climate-linked thematic ETFs globally, with $74.4bn in thematic assets 15.9% market share, followed by Mirae Asset and First Trust. The top three providers now control over 32% of global thematic ETF assets, underscoring a shift toward large, liquid ESG implementations rather than niche products.

Flows reinforce that pattern. Year-to-date net inflows reached $69.6bn, and November marked the 12th consecutive month of positive flows, even as markets softened. Crucially, the top 20 thematic ETFs captured $6.7bn of November’s inflows, led by ESG-tilted AI and climate-technology strategies suggesting institutional preference for scalable transition exposure rather than fragmented ESG themes.

For asset and investment managers, the signal is clear: ESG thematics are evolving from values-driven allocations into strategic transition tools, increasingly used to express long-term views on decarbonisation, digital efficiency, and climate-linked growth. For real estate and real asset investors, this trend mirrors what’s happening in private markets capital is gravitating toward transition-aligned assets with measurable outcomes, regulatory tailwinds, and credible cash-flow durability.