Many countries have seen a surging anti-ESG movement in the past two years—most notably the US.
Part of the highly divisive ‘culture wars’, anti-ESG sentiment is becoming a key feature of right-wing politics, particularly within the US Republican Party and UK Conservative Party. As climate change worsens and ecological breakdown seems more and more likely, understanding the anti-ESG movement’s trajectory will be crucial to real climate action. And the future of this movement will hinge on several elections in 2024.
The anti-ESG movement is scaring businesses into greenhushing
The anti-ESG movement first started to gain traction in the US. It generally focuses on two specific areas: ESG business practices and ground-level climate mitigation policies. In March 2022, The US Securities and Exchange Commission (SEC) proposed a set of climate disclosure rules, which would have required businesses to report their Scope 3 emissions. They were subsequently accused of overreach by a sect of right-wing Republicans.
Since then, the so-called ‘ESG Working Group’ (the anti-ESG Republicans) have been increasingly vocal about their grievances with sustainable business. In January 2023, 25 US states sued the Department of Labor for allowing asset managers to consider ESG concerns in their investment strategy. The Legal 500 suggests that over 250 anti-ESG bills have been filed in the US this year, compared to 39 in the whole of 2022.
As a result, many large companies have scaled back their ESG efforts and marketing massively—a phenomenon known as ‘greenhushing’. Vanguard, a leading asset management company, pulled out of the Net Zero Asset Managers group at the end of 2022. Similarly, many major insurance firms exited the Net Zero Insurance Alliance in the first half of 2023. Larry Fink, the CEO of BlackRock, has abandoned the term ‘ESG’ altogether.
US Sneezes – UK catches cold
The anti-ESG movement has also reared its head across the pond in the UK. When London expanded its ultra-low emissions zone, massive backlash ensued—including large protests and supposed ‘vigilante’ groups vandalizing the cameras.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataA Conservative Party candidate for the Uxbridge and Ruislip by-election ran an anti-ULEZ campaign in mid-2023 and clawed a slim but shocking victory from the jaws of electoral defeat. Since then, it appears the Conservatives have shifted their political strategy to be more anti-ULEZ, and therefore more anti-ESG.
Right-wing politicians on both sides of the Atlantic have political incentives to promote the anti-ESG movement: it is a territory where they can differentiate themselves from the increasingly central center-left.
Electoral outcomes will speak to the success of the anti-ESG movement
It is the success of these electoral strategies that will determine whether the anti-ESG movement really has legs.
Republicans in the US gained ground in the November 2022 midterm elections after a year of anti-ESG campaigning. Donald Trump, the likely Republican candidate for the 2024 presidential election, announced at the start of 2023 that he would use an executive order to stop ESG investing. If he wins the election, the political establishment may view this as confirming that anti-ESG campaigning is an effective electoral strategy.
Similarly, in the UK, the 2024 general election will likely be an ESG showdown. If the Conservatives score another term in government, it will prove that anti-ESG can salve the wounds of consistent criticism and popularity deficit in the polls.
If, however, center-left candidates secure victory in the 2024 elections, the anti-ESG movement will begin to decelerate—and may even wither away.
