ESG is now mainstream despite US skepticism, say investors
As Republican legislators in the US try to wipe ESG off the map, most global investors and executives are acting as though those efforts will ultimately fail.
Using environmental, social and governance metrics is now mainstream, according to 89% of investors who responded to a survey published Wednesday by Bloomberg Intelligence. And 57% said the “ESG” label shouldn’t be replaced by something less incendiary, despite the backlash.
ESG is primarily being used to “improve profit, competitiveness and brand value,” according to Bloomberg Intelligence, whose full survey findings are based on responses from 250 C-suite executives and 250 senior investors distributed evenly across the US, Europe and the Asia-Pacific region.
Overall, the survey found that 85% of investors think ESG leads to “better returns, resilient portfolios and enhanced fundamental analysis.” Among executives surveyed, 84% said ESG helps them “shape a more robust corporate strategy,” according to Adeline Diab, BI’s director of ESG strategy and research.
The findings come as ESG fund flows have showed signs of cooling, against a backdrop of continued political attacks and disappointing returns. This year, investors in wind and solar stocks have seen their investments sink as higher interest rates and supply-chain bottlenecks have pummeled the renewable-energy sector.
Meanwhile, laws seeking to ban ESG are spreading across GOP-led US states. The development has drawn warnings from some of the biggest names on Wall Street, as banks and asset managers get punished for policies deemed unfriendly to the gun and fossil fuel industries. This month, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon warned that Texas risks undermining its business-friendly
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