Climate activists and ESG investors are rethinking their strategies for the anti-ESG age.
The anti-ESG movement has been building for around three years now, but with the imminent arrival of the Trump Adminstration and possible rollbacks in Europe, the anti-ESG movement is likely to go into hyperdrive. Case in point, last week, ten Republican state attorneys general sued asset managers BlackRock, State Street, and Vanguard, accusing them of manipulating the market to speed up the decline of the coal industry to meet climate targets.
Brenna Bird, Attorney General of Iowa, said that Donald Trump’s electoral win inspired the lawsuit, adding, “As part of that election, Americans rejected woke extremism, and they sent President Trump a strong mandate to restore our country.”
In the face of an energized opposition, climate activists are changing tactics. OG climate activist Bill Mckibben and his new non-profit, Third Act, are turning their focus to local, community-based activism and attending important meetings at the state and local level in areas critical to the energy transition.
Mckibben also believes activists must adopt a more hopeful tone. “My sense is there’s a great hunger for some very positive things to be working on in what is a very dark moment in both our nation’s and our planet’s history.” Youth climate activists who worked under the first Trump administration and are now organizing to elect a more climate-friendly US Administration in 2028 share this sentiment.
ESG funds had record levels of liquidations and name changes in the EU last quarter. In the US, for the 5th straight quarter, the number of ESG funds being liquidated outpaced new ones being created. With this backdrop, it is remarkable that sustainable investors are expressing confidence.
However, Global sustainable funds attracted $10.4bn in new investments in Q3, an increase from the previous quarter. Plus, larger asset owners, whose planning goes far beyond election cycles, recognize the material impacts of ESG. Even if more anti-ESG investing rules do come in, Hortense Bioy of Morningstar Sustainalytics said, “This will lead to more ‘greenhushing’ as companies will continue to consider ESG factors they think are material to their business.”
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