Ali Hassan*, Léo Loubradou**

*In this paper, we examine the determinants of investor money flows in sustainable mutual funds. Owing to differences in preferences, we posit that ESG investors are more sensitive to mutual fund financial attributes than impact investors are. Using a dataset of 840 actively managed European sustainable equity funds for the period 2018–2025, we find that fund flows are significantly more sensitive to past performance for ESG funds than for impact funds. Our empirical results are in line with impact investor specificity among sustainable investors: the first invest for ESG values, whereas the latter invest with ESG values. Our findings are robust to alternative sustainable classifications, geographical investment areas, investor types and time sampling.

**We study the effect of sustainability signals on mutual fund flows. We examine whether the proliferation of signals enhances their credibility or whether only specific signals effectively influence investor behavior. We find that only a subset of signals—SFDR Article 9 classification, sustainability labels, and impact fund names—significantly alters the flow–performance relationship. Funds displaying these signals exhibit weaker sensitivity of flows to negative performance and reduced performance-chasing, consistent with the presence of sustainability-oriented investors. We further show that combining credible signals strengthens these effects, suggesting a higher willingness to pay for sustainability. Our results identify which signals are perceived as credible and highlight that the proliferation of signals can generate heterogeneous — and sometimes counterproductive — effects on investor.