By Tim Bovy and Ian Hodges
ESG is resilient because it addresses the issues that threaten existential risk to the economies of the world. ESG will persist because economics is not an abstract concept, but a description of the livelihoods and lifestyles of the peoples of the world interacting with each other and with the environment.
Despite the immense negative attention ESG has received over the years, it continues to find support and commitment across industry and commerce. The principles behind ESG, and even the acronym itself, have come under repeated attack almost since the expression was first coined in 2004. These attacks have changed in nature and ferocity.
The early criticisms of ESG can be largely understood as academic and market scepticism. The focus was on performance, greenwashing and fiduciary responsibility. Much of it was well intentioned and constructive and has influenced the development of ESG and related initiatives such as the switch to green energy and the development of sustainable communities.
However, the last six years have seen a backlash which started in the US and spread to Europe and Asia. This was a concerted, if not coordinated, campaign to cast ESG as a political cause to be resisted and ultimately stopped. It had become a proxy battlefield for the broader culture wars of the new right that itself had only recently come to prominence.
The backlash in Europe is a pale, watery replica of much of what has happened in the US, though it has still succeeded in hindering the cause of ESG.
We argue that the current backlash began in the US in 2021 when Texas Senate Bill 13 sought to prohibit state entities from engaging with financial firms seen to be boycotting oil and gas. Similar legislation followed in other US states. In the latest reversal of ESG initiatives, the Trump administration has announced it will repeal the 2009 ruling that required the Environmental Protection Agency to regulate greenhouse gasses. In September 2025, “President Donald Trump rebuked world leaders for being overly concerned about climate change during a speech to the United Nations in which he called global warming a ‘con job.’”1 He also “argued that renewable energy such as wind and solar are a “scam” that should be eliminated, [urging] nations instead to buy more American oil and gas.”2
The backlash in Europe is a pale, watery replica of much of what has happened in the US, though it has still succeeded in hindering the cause of ESG.
Trump’s pronouncements typically have a global impact, and the EU is no exception. In recent years, Europe is seeing a growing timidity in its legislative ambitions, increasingly stepping back from implementing the full intent of drafted legislation. European carbon trading is facing increased criticism, while 80 such schemes exist across the globe.
Many may feel ESG and the outcomes and values it champions are faltering, but we would disagree. While not mentioning ESG, Mark Carney’s speech at Davos earlier this year did suggest a way forward for ESG for which we think there are already good examples. Mr Carney spoke of Canada’s adaptation and resilience in response to a changing world while maintaining the integrity of its principles.
ESG seeks to put environmental, social and governance factors at the heart of business strategy and operations to see greater transparency and disclosure for investors to assess risks and opportunities and to encourage enterprises to engage constructively on ESG issues with investors. And both investors and analysts are encouraged to require ESG reporting in an effort to build resilient and sustainable markets in which long-term value creation is valued over short-term performance. The World Economic Forum has made this thinking a centrepiece of its shift from shareholder to stakeholder capitalism, encouraging investors to reject the Friedmanite model of “short-term profit maximization as [the] highest good” to “focus on long-term value creation and ESG measures.”3
These central tenets are now widely accepted by major asset owners across Europe and Asia. Among them are the signatories to the Asset Owner Statement on Net Zero Asset Managers (NZAM). More than 50 large pension funds and other asset owners representing $3.7 trillion in assets under management have signed the statement calling on asset managers to participate in and commit to the values of NZAM. In recent weeks, two Dutch pension funds have withdrawn significant investment mandates from BlackRock and last year a major UK pension withdrew from State Street.
Asset owners look long term and are deeply concerned by the climate crisis and increasingly require their asset managers to put these issues in the forefront of their planning. They are demonstrating an intent to pursue long-term goals despite pressure from short-termist critics.
Two Dutch pension funds have withdrawn significant investment mandates from BlackRock and last year a major UK pension withdrew from State Street.
In March, the Sustainable Markets Authority held its CEO Summit. Launched at the 2020 World Economic Forum at Davos by the then Prince of Wales, it was hosted this year at Hampton Court by King Charles III. This is an initiative that seeks to reshape the current economic model to accommodate climate concerns. As the Financial Times recently acknowledged, it has retained its founding chair, Bank of America chief executive Brian Moynihan, despite Bank of America choosing to withdraw from the Net Zero Banking Alliance, with other US banks, when Donald Trump was reelected. The State Street chief executive was also present at the event.
The Financial Times may be correct in assessing that the ‘cover’ afforded by the involvement of King Charles to members of the Sustainable Markets Authority may be a significant explanation for the continued support from many US financial institutions, but is it not a sufficient rationale for the persistence of the Sustainable Markets Authority. It is the urgency of the questions that the continuing and deepening climate crisis and resulting societal strain poses that ensure such fora will continue.
In May 2025, for example, the United Nations introduced the High-Level Expert Group on Beyond GDP. UN Secretary-General Antonio Guterres said: “Moving beyond gross domestic product is about measuring the things that really matter to people and their communities. GDP tells us the cost of everything, and the value of nothing. Our world is not a gigantic corporation. Financial decisions should be based on more than a snapshot of profit and loss.”4 Guterres has also expressed his dismay that current accounting systems skew our sense of true economic value by rewarding pollution and the destruction of nature—such as deforestation and overfishing—which are counted as economic gains.
ESG is, and will continue to be, resilient because it seeks to address the issues that in the medium and long term threaten existential risk to the economies of the world and for all those engaged within them. ESG will persist because economics is not an abstract concept but a description of the livelihoods and lifestyles of the peoples of the world interacting with each other and with the environment.
About the Authors
Tim Bovy has over 35 years of experience in designing and implementing various types of information and risk management systems for major law firms such as Clifford Chance; and for international accountancy firms such as Deloitte. He has also developed solutions for organisations such as BT, Imperial Tobacco, Rio Tinto, the Kuwaiti government, The Royal Household, and the US House of Representatives. Tim is an elected member of The Royal Institute of International Affairs, Chatham House, an Independent Think Tank based in Central London, and holds a BA degree, magna cum laude, from the University of Notre Dame, and MA and C.Phil degrees from the University of California, Davis.
Ian Hodges has worked in a variety of information management roles over a twenty-year career. He has designed and implemented records and information management systems at a national scale, developing parts of the digital archive at The National Archives (UK). At a corporate level he’s undertaken information management projects with The Royal Household and Her Majesty’s Treasury. Ian also has information rights expertise developing policies and procedures for Freedom of Information and Data Protection compliance and working as a Data Protection Officer. In addition to CISM, CIPP/E and CIPM certifications, Ian holds a BA degree from the University of Southern Queensland, a postgraduate diploma from Deakin University, Melbourne and an MA from Birkbeck, University of London.
