(Bloomberg) -- The debate over whether investing with ESG principles in mind makes money is one that’s grown in recent years as the global market for sustainable funds has ballooned to more than $2.2 trillion.

Market data show that the average equity fund adhering to environmental, social and governance factors has lost slightly less money this year than products that track vanilla benchmark indexes such as the S&P 500.

A review of the longer-term record also supports the notion that ESG funds can outperform. About 56% of US sustainable funds beat rival category groups in the three-year period ended Sept. 30, according to researchers at Morningstar Inc.

That isn’t swaying opinions, at least for next year. In a Bloomberg News survey of terminal and Bloomberg.com readers, 65% of the respondents expect ESG funds to trail the broader market in 2023. Of the 691 respondents, 264 expect ESG funds to “slightly underperform” and 184 are predicting they’ll “significantly underperform.”

But not everyone agrees. Ross Seiden of Lazard Asset Management is among those feeling more optimistic.

“We are excited for 2023 as we believe there will be opportunities to identify and invest in market-leading companies across a host of sustainable technologies,” said Seiden, who oversees Lazard’s US sustainable equity strategy. He pointed to energy efficiency, electric vehicles, solar, water, carbon capture and sequestration as businesses poised to benefit from the Biden administration’s Inflation Reduction Act.

Fionna Ross of Scotland’s Abrdn Plc has a less bullish outlook.

“Given the challenges of 2022, there will be some recovery next year,  but it will remain mixed” because of inflation and other overhanging economic hurdles, said Ross, who runs of Abrdn’s sustainability institute.

Of the 691 people surveyed by Bloomberg, 235 identified themselves as being directly involved in ESG investing. Of this group, a little more than half said they expect the funds to “slightly” or “significantly” underperform.

Read more about findings from the Bloomberg ESG survey:

  • Anti-ESG GOP Rhetoric Threatens Flows as Midterms Loom: Survey

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