Some analysts say that support for the progressive ideologies was never deeply rooted among many corporate executives.
Despite recent eulogies for the environmental, social and governance (ESG) movement, as well as diversity, equity, and inclusion (DEI) policies, many insiders say the funeral is premature.
“Their demise is inevitable, and it has been accelerated,” David Bahnsen, chief investment officer of the Bahnsen Group and formerly an asset manager at Morgan Stanley, told The Epoch Times.
However, “they are not over,” he said.
The ESG movement began two decades ago with a U.N. initiative, sketched out in a 2004 position paper called Who Cares Wins, to get private companies in line with the U.N.’s Sustainable Development Goals.
Those goals included, among other things, climate action and gender and racial equity, and they aligned with corporate trends such as “conscious capitalism” and “stakeholder capitalism,” which redirected companies from merely serving owners to serving employees, the community, and the environment.
Institutional asset managers gave the ESG movement critical leverage over companies because they collectively own about 80 percent of the shares in S&P 500 companies. Immediately upon its introduction, ESG was endorsed by 23 financial institutions collectively representing more than $6 trillion in assets at the time.
Most major banks, asset managers, and insurance companies quickly joined U.N.-sponsored climate clubs, including the Net Zero Banking Alliance, the Net Zero Asset Managers initiative, and the Net Zero Insurance Alliance. This was followed by a proliferation of ESG rating agencies, consultants, accountants, and others dedicated to measuring companies’ compliance with ESG criteria.
Twenty years later, the winds appear to have shifted. In 2024, half of the Net Zero Insurance Alliance members quit, while the Net Zero Asset Managers initiative suspended its activities in January after several of its largest members, including BlackRock, left the group.
A 2024 Securities and Exchange Commission (SEC) order that required listed companies to produce audited reports of their CO2 emissions and their plans to reduce them, faced numerous court challenges and was recently shelved. And on the social justice front, a parade of companies recently announced that they are downsizing their diversity programs.
