In the US, there’s evidence that anti-ESG rhetoric has led some financial firms to tone down their commitments to ESG in their conversations with clients. And pension funds have been caught in a long-running battle between the Biden administration and Republicans over whether they’re allowed to take ESG risks into account in their investments
Investors in the UK are starting to worry that the anti-ESG movement may spread from the US and get a foothold on the other side of the Atlantic.
The UK Sustainable Investment and Finance Association (UKSIF), whose members oversee more than £19 trillion ($24 trillion) and include JPMorgan Chase & Co. and Barclays Plc, wants Britain’s government to provide clear guidelines that spell out whether it’s part of an asset manager’s fiduciary duty to worry about risks stemming from environmental damage, social unrest and bad corporate governance.
James Alexander, chief executive officer of the association, said he expects that UKSIF and other investor associations will soon “need to make the stronger public case that actively incorporating ESG considerations — including material social factors — isn’t in direct pursuit of an overt political agenda, but necessary for investors to fulfill their fiduciary duty.”
He’s one of a growing number of financial market participants in the UK and European Union watching developments in the US with a sense of unease.
The backlash against ESG led by the Republican Party has shocked the industry, as threats of lawsuits and blacklists hit some of the world’s biggest banks and asset managers. The GOP has dubbed ESG an anti-American movement that puts a “woke” agenda ahead of fiduciary duties.
In the US, there’s evidence that anti-ESG rhetoric has led some financial firms to tone down their commitments to ESG in their conversations with clients. And pension funds have been caught in a long-running battle between the Biden administration and Republicans over whether they’re allowed to take ESG risks into account in their investments.
There’s so far little to suggest that similar levels of hostility toward ESG are brewing in Britain. But a few isolated incidents stand out.
During a speech to the UK House of Commons in October defending the right of police to treat Just Stop Oil protesters as criminals, Home Secretary Suella Braverman adopted rhetoric that was straight out of the GOP playbook, as she assailed the “tofu-eating wokerati” that she said dominate the left wing of British politics.
Bloomberg