A recent backlash against ESG investment in the United States, driven by conservative politicians and lobby groups, appears to have had limited effect in dissuading firms, new research from Bloomberg Intelligence has found – in fact, if anything, it encouraged businesses to increase their investment.
Bloomberg Intelligence conducted a survey involving 250 institutional investors and 250 high-level corporate executives to gather their perspectives on ESG and the anticipated trends in 2024 and beyond. This included their response to the recent pushback against so-called ‘woke capitalism’ in the US.
When questioned about whether the political resistance to ESG investing influenced any alterations in their corporate investment strategies, more than half (54%) of the surveyed investors indicated that they were planning to increase their investment in sustainability. Meanwhile, just under a third (31%) stated that they do not intend to modify their approach in response to the opposition.
Some 14% of investors said that they had introduced a ‘temporary slowdown’ on ESG investment as a result of the backlash, while just 1% said that they had halted their ESG investment strategy as a result.
Investment spending
When asked about their investment spending plans for the next two years, some 38% of institutional investors and 23% of business executives said that they planned to increase their ESG budgets by 20% or more.
Around half (47% in the case of institutional investors and 54% in the case of business executives) plan to increase ESG investment by between 1% and 20%.
Business incentive
Citing a separate study from the University of Leeds and University of Durham, which noted that when analysts cover a business from an ESG perspective, it acts as an incentive for business leaders to up their performance in this area, Joachim Klement, an analyst with Liberum, said that the findings of the Bloomberg Intelligence study were unsurprising.
“As investors increase their ESG budgets and more and more analysts take up ESG criteria as part of their work, we should expect that the pressure on improving ESG practices increases and businesses that ignore these issues will increasingly be penalised in the stock market,” he commented.
On the fact that many companies are actually increasing their spend amidst conservative pressure, he added, “It seems as if that political pushback is not only going nowhere but suffers from the Streisand effect.”
