U.S. finance faces ESG backlash, more to come in 2023

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A movement by financial firms and activists to challenge companies over their efforts on climate change and social inequality faced organised and growing push-back in 2022, led by Republican U.S. politicians.

and Democratic state officials, which collectively have more money to invest, calling for BlackRock and others to stand firm or be even more ambitious in its climate efforts.The criticism comes at a critical time for global climate efforts. A landmark U.N.

of the Net Zero Asset Managers initiative, a group of investors pushing for net-zero emissions, citing a need to demonstrate its independence.to scale back planned rules on climate-related financial disclosures. Given the United States is the biggest economy in the world with many large multi-national companies, any fracturing of the regulatory response from the world's leading markets could dull their collective impact.With a number of investigations into finance-linked ESG activities still in train across various states, the prospect of a let-up in pressure in 2023 is slim.

Market watchers will be looking to see how leading investors exercise their voting power in the season for annual shareholder meetings, although BlackRockThe outcome of the SEC's climate disclosure rules, as well as its efforts to rein in 'greenwashing', where firms issue misleading statements around their environmental efforts, will all help shape the future for ESG in the country.

For some, the ESG question is even more existential: has it become so politicised that firms decide not to use it in marketing and corporate communications, maybe opting for other, less loaded words?Reporting by Simon Jessop; Editing by Anna Driver

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There’s nothing good about ESG, it’s like a cancer spreading through our economic system.

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