“Environmental, social and governance” investing – also known as ESG – has had a tough few months. The first hit came in late June when Larry Fink, CEO of the world’s largest asset-management company, BlackRock, said his company would no longer label its funds “ESG”. This is a huge blow to the industry, as BlackRock was an early adopter. But BlackRock is not alone. A survey from RBC Capital Markets finds that 56% of US sustainable-fund launches in 2023 labelled their product “thematic” rather than “ESG”.
Why are the titans of global finance turning on ESG? Fink said that it was due to the “politicisation” of the brand. He probably had in mind Florida’s governor Ron DeSantis signing a bill into law in May banning state officials from investing public money to promote ESG. DeSantis’s move can be seen as part of a broader concern on the political right that companies are moving away from their historical focus on making money and are leaning into political and social issues.
But this
