Latest news with #anti-ESG
Yahoo
03-06-2025
- Business
- Yahoo
Vanguard to add four more funds to investor proxy choice program
This story was originally published on ESG Dive. To receive daily news and insights, subscribe to our free daily ESG Dive newsletter. Vanguard will expand its program allowing investors to choose individualized investment and engagement policies to four more funds in the second half of 2025, the company announced last week. The nation's second-largest asset manager said the program will include four index funds, allowing nearly 10 million investors to participate if they so choose, according to a May 29 release. The expansion will 'nearly quadruple' the assets under management to nearly $1 trillion in program eligible funds and bring the total number of funds eligible funds to 12. The program's expansion comes after an April Vanguard survey of more than 1,000 investors found 83% of respondents believed it was important for asset managers to consider investor preference when casting proxy votes, and 57% of respondents expressing interest in participating in proxy choice programs. Vanguard first launched its proxy voting choice pilot in February 2023 with three eligible equity funds, before including two additional index funds for the 2024 proxy season and adding three more in November to bring the total to eight eligible funds. The program gives participating investors five different policy options, allowing participants to align their votes with company boards, Vanguard's recommendations, Glass Lewis' ESG policy, a 'wealth-focused' anti-ESG policy from Egan-Jones or vote in proportion with other shareholders. Vanguard expanded its policy options for the 2025 proxy season to give investors the Egan-Jones policy option and replaced a former 'not voting' with the mirror voting policy. Additionally, November's expansion was the first time that retirement plan sponsors were allowed to participate if they have program eligible funds in their portfolio. Vanguard's Global Head of Investment Stewardship John Galloway said in last week's release that the program's continued expansion 'underscores [Vanguard's] confidence that a range of independent perspectives contributes to a healthy corporate governance ecosystem and well-functioning capital markets.' The expansion will add Vanguard's Value Index Fund, Growth Index Fund, Mid-Cap Index Fund and Large-Cap Index Fund to the program. The May 29 program expansion will also broaden its eligibility to 529 plan sponsors, according to the release. Two-thirds of investors who participated in Vanguard's April study (66%) said they would opt in to such a program if offered by their employer's retirement plan. However, the expanded eligibility does not guarantee expanded asset manager reported having 40,000 participants in the program after the 2024 proxy season, which Morningstar Sustainalytics' Director of Investment Stewardship Research Lindsey Stewart said at the time was a 'decent start,' but 'not a large proportion' of Vanguard's investors. Last September, Vanguard reported a plurality of participants — 43% — aligned their voting policy with the asset manager's recommendations in the 2024 proxy season and another 30% aligned their votes with company board recommendations. Under a quarter of participants (24.4%) chose the Glass Lewis ESG policy. Recommended Reading Vanguard's updated investor proxy choice program includes anti-ESG voting option Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
Bloomberg
03-06-2025
- Business
- Bloomberg
Investors Say They're Moving Away From ESG as ‘an Umbrella Concept'
While institutional asset owners such as pension funds and insurers say they remain committed to sustainable investing, they're less wedded to ESG as 'an umbrella concept.' They now widely treat ESG as three separate parts as opposed to a single strategy, according to a survey by Morningstar Inc. of 25 asset owners across North America, Europe and the Asia-Pacific region. Until recently, the anti-ESG push has been concentrated in the US.
The Advertiser
29-05-2025
- Business
- The Advertiser
ESG inventor says Trump its 'best possible advert'
The man credited for coining "ESG" - environmental, social and governance - considers US President Donald Trump the ideal advertisement for responsible investment. Paul Clements-Hunt, a former United Nations official, said the Republican leader was illustrative of the pitfalls of "getting economics wrong" by fuelling social inequality. "Trump is the best possible advert for ESG, particularly the "G" at the governance level," he told a sustainable investment forum on Wednesday. The Blended Capital Group chief executive officer was pressed for his views on the percolating ESG backlash at the two-day Responsible Investment Association Australasia conference in Sydney. He spoke alongside Maria Lettini, chief executive officer at the US Sustainable Investment Forum and on the front line of the anti-ESG sentiment taking root in America. Ms Lettini said it was hard to keep up with efforts in the US to unwind and undermine climate change and ESG polices, such as potential roll-backs to renewable and clean tech incentives under the Inflation Reduction Act. Asked if responsible investment advocates were doing enough to defend ESG as a useful lens for delivering risk-adjusted returns, Ms Lettini recommended going "back to basics" on communication. "We need basic data, we are responding to clients wishes, we're responding to our fiduciary duty obligations," she said. "And it sounds a bit rolling back a couple of decades to be very dry with our responses, but that's what we are doing more." University of Melbourne professor of US politics Timothy Lynch was critical of ESG, describing it as a "terrible advert for what it is trying to do", reliant on "huge subsidy" and "management by elites". Prof Lynch posited the popular perception of ESG was of elites taking up incentives for clean energy while "forgetting the lived experience of many people that don't benefit". "It's too much concern with posturing and less with economic realities," he said. Mr Clements-Hunt said responsible investment was about identifying for-profit business models that delivered impact, including sanitation and clean energy in Sub-Saharan Africa. "I can't agree with that suggestion of lecturing to poor people," Mr Clements-Hunt countered. ESG was never intended as a political slogan to appeal to ordinary people, he said, but rather devised to change cultures within asset owner organisations. "It was just to ask the question, how do these systemic risks chew up your capital? And how do you unlock value in the long term?" Mr Clements-Hunt said it had largely "done its job" and was now embedded into the prudential oversight system and other financial frameworks. The man credited for coining "ESG" - environmental, social and governance - considers US President Donald Trump the ideal advertisement for responsible investment. Paul Clements-Hunt, a former United Nations official, said the Republican leader was illustrative of the pitfalls of "getting economics wrong" by fuelling social inequality. "Trump is the best possible advert for ESG, particularly the "G" at the governance level," he told a sustainable investment forum on Wednesday. The Blended Capital Group chief executive officer was pressed for his views on the percolating ESG backlash at the two-day Responsible Investment Association Australasia conference in Sydney. He spoke alongside Maria Lettini, chief executive officer at the US Sustainable Investment Forum and on the front line of the anti-ESG sentiment taking root in America. Ms Lettini said it was hard to keep up with efforts in the US to unwind and undermine climate change and ESG polices, such as potential roll-backs to renewable and clean tech incentives under the Inflation Reduction Act. Asked if responsible investment advocates were doing enough to defend ESG as a useful lens for delivering risk-adjusted returns, Ms Lettini recommended going "back to basics" on communication. "We need basic data, we are responding to clients wishes, we're responding to our fiduciary duty obligations," she said. "And it sounds a bit rolling back a couple of decades to be very dry with our responses, but that's what we are doing more." University of Melbourne professor of US politics Timothy Lynch was critical of ESG, describing it as a "terrible advert for what it is trying to do", reliant on "huge subsidy" and "management by elites". Prof Lynch posited the popular perception of ESG was of elites taking up incentives for clean energy while "forgetting the lived experience of many people that don't benefit". "It's too much concern with posturing and less with economic realities," he said. Mr Clements-Hunt said responsible investment was about identifying for-profit business models that delivered impact, including sanitation and clean energy in Sub-Saharan Africa. "I can't agree with that suggestion of lecturing to poor people," Mr Clements-Hunt countered. ESG was never intended as a political slogan to appeal to ordinary people, he said, but rather devised to change cultures within asset owner organisations. "It was just to ask the question, how do these systemic risks chew up your capital? And how do you unlock value in the long term?" Mr Clements-Hunt said it had largely "done its job" and was now embedded into the prudential oversight system and other financial frameworks. The man credited for coining "ESG" - environmental, social and governance - considers US President Donald Trump the ideal advertisement for responsible investment. Paul Clements-Hunt, a former United Nations official, said the Republican leader was illustrative of the pitfalls of "getting economics wrong" by fuelling social inequality. "Trump is the best possible advert for ESG, particularly the "G" at the governance level," he told a sustainable investment forum on Wednesday. The Blended Capital Group chief executive officer was pressed for his views on the percolating ESG backlash at the two-day Responsible Investment Association Australasia conference in Sydney. He spoke alongside Maria Lettini, chief executive officer at the US Sustainable Investment Forum and on the front line of the anti-ESG sentiment taking root in America. Ms Lettini said it was hard to keep up with efforts in the US to unwind and undermine climate change and ESG polices, such as potential roll-backs to renewable and clean tech incentives under the Inflation Reduction Act. Asked if responsible investment advocates were doing enough to defend ESG as a useful lens for delivering risk-adjusted returns, Ms Lettini recommended going "back to basics" on communication. "We need basic data, we are responding to clients wishes, we're responding to our fiduciary duty obligations," she said. "And it sounds a bit rolling back a couple of decades to be very dry with our responses, but that's what we are doing more." University of Melbourne professor of US politics Timothy Lynch was critical of ESG, describing it as a "terrible advert for what it is trying to do", reliant on "huge subsidy" and "management by elites". Prof Lynch posited the popular perception of ESG was of elites taking up incentives for clean energy while "forgetting the lived experience of many people that don't benefit". "It's too much concern with posturing and less with economic realities," he said. Mr Clements-Hunt said responsible investment was about identifying for-profit business models that delivered impact, including sanitation and clean energy in Sub-Saharan Africa. "I can't agree with that suggestion of lecturing to poor people," Mr Clements-Hunt countered. ESG was never intended as a political slogan to appeal to ordinary people, he said, but rather devised to change cultures within asset owner organisations. "It was just to ask the question, how do these systemic risks chew up your capital? And how do you unlock value in the long term?" Mr Clements-Hunt said it had largely "done its job" and was now embedded into the prudential oversight system and other financial frameworks. The man credited for coining "ESG" - environmental, social and governance - considers US President Donald Trump the ideal advertisement for responsible investment. Paul Clements-Hunt, a former United Nations official, said the Republican leader was illustrative of the pitfalls of "getting economics wrong" by fuelling social inequality. "Trump is the best possible advert for ESG, particularly the "G" at the governance level," he told a sustainable investment forum on Wednesday. The Blended Capital Group chief executive officer was pressed for his views on the percolating ESG backlash at the two-day Responsible Investment Association Australasia conference in Sydney. He spoke alongside Maria Lettini, chief executive officer at the US Sustainable Investment Forum and on the front line of the anti-ESG sentiment taking root in America. Ms Lettini said it was hard to keep up with efforts in the US to unwind and undermine climate change and ESG polices, such as potential roll-backs to renewable and clean tech incentives under the Inflation Reduction Act. Asked if responsible investment advocates were doing enough to defend ESG as a useful lens for delivering risk-adjusted returns, Ms Lettini recommended going "back to basics" on communication. "We need basic data, we are responding to clients wishes, we're responding to our fiduciary duty obligations," she said. "And it sounds a bit rolling back a couple of decades to be very dry with our responses, but that's what we are doing more." University of Melbourne professor of US politics Timothy Lynch was critical of ESG, describing it as a "terrible advert for what it is trying to do", reliant on "huge subsidy" and "management by elites". Prof Lynch posited the popular perception of ESG was of elites taking up incentives for clean energy while "forgetting the lived experience of many people that don't benefit". "It's too much concern with posturing and less with economic realities," he said. Mr Clements-Hunt said responsible investment was about identifying for-profit business models that delivered impact, including sanitation and clean energy in Sub-Saharan Africa. "I can't agree with that suggestion of lecturing to poor people," Mr Clements-Hunt countered. ESG was never intended as a political slogan to appeal to ordinary people, he said, but rather devised to change cultures within asset owner organisations. "It was just to ask the question, how do these systemic risks chew up your capital? And how do you unlock value in the long term?" Mr Clements-Hunt said it had largely "done its job" and was now embedded into the prudential oversight system and other financial frameworks.
Business Times
18-05-2025
- Business
- Business Times
Are investors hitting the ‘pause' button on sustainable investing?
[SINGAPORE] Sustainable investing was all the rage some years ago, but its shine appears to be fading. What would it take to revive investor interest? Morningstar's latest fund flows data for global sustainable funds in the first quarter found 'record-high' outflows mainly in the US – which isn't a surprise – but also in Europe, albeit to a more modest degree. This is happening at a time when global temperatures are rising, and energy transition and climate commitments are under threat even as war has intensified carbon emissions. What factors are driving investors' change of heart? One is US president Trump's anti-ESG and anti-DEI (diversity, equity, inclusion) rhetoric and policies, which may have caused negative investor sentiment to deepen. Relatively poorer returns from sustainable funds compared to conventional funds may also exacerbate dissatisfaction. The US administration's anti-ESG policies are also causing asset managers to turn cautious on new products for fear of stepping into a legal minefield. Managers also grapple with an evolving regulatory backdrop, where new rules focusing on fund names and marketing are taking effect. Over the past couple of years, managers fined for greenwashing included DWS in Europe and Invesco and Goldman Sachs in the US. Morningstar data for the first quarter of 2025 shows redemptions of US$8.6 billion, with the US accounting for 70 per cent or US$6.1 billion. The US sustainable funds market has so far seen 10 consecutive quarters of net outflows. Europe's outflows at US$1.2 billion were more modest, but it was the first net outflow since Morningstar began to track sustainable investment funds in 2018. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Morningstar said an increasingly complex geopolitical environment has 'deprioritised sustainability concerns in Europe, including climate goals''. Trump's anti-ESG policies have had a ripple effect. 'For some European investors, the rollback in ESG commitments by US firms has created hesitation, undermining the sense of global alignment on climate and sustainability goals. This hesitation is further compounded by an evolving European regulatory agenda and ESG fund landscape, while persistent performance concerns – particularly in already challenged sectors such as clean energy – continue to weigh on investor appetite for sustainability strategies.' The sustainable funds universe comprising open-ended funds and exchange traded funds has US$3.16 trillion in assets as at end-March, just a tad lower than US$3.18 trillion at the end of Q1 2024. Europe's share is 84 per cent, and the US 10 per cent share. Disappointing performance Returns from funds with a sustainable bent – which include screening for ESG factors and/or exposure to sustainable development goals – have underperformed since around 2022. Elston Consulting notes that the 'golden era' of ESG investing appeared to have been the Covid era, when ESG-focused world indexes outperformed and the funds saw record inflows. But higher inflation, which now looks set to be sticky, and elevated geopolitical tensions have reversed that. Elston said ESG-focused funds do not hold fossil fuel companies and had less exposure to sectors seen to provide a degree of inflation protection, such as commodities and energy. Heightened geopolitical tensions such as the ongoing Ukraine war also boosted the defence sector, which is excluded from sustainable funds. 'While pre-2022 some have argued for an ESG premium over the long run (good companies should be well rewarded via a lower risk premium), since 2022 the hard reality of ESG relative underperformance compared to traditional equities is a reminder that any such premium is indeed 'long run', and in the meantime, short- and medium-term performance differentials matter too,' the firm wrote. The MSCI World Selection Index, which uses ESG criteria, has underperformed the conventional MSCI World Index for various periods up to 10 years. Year to end-April, the World Selection index lost 2.54 per cent against minus 0.77 per cent in the MSCI World. Over three years, the annualised return was 10.62 per cent against 11.6 per cent, respectively. What's in a name? Fund launches have tamped down significantly in recent quarters, Morningstar said, reflecting the 'normalisation' of product development activity after high growth in the years 2020 to 2022. There were only 54 new funds globally in the first quarter, compared to 105 in the previous quarter. 'Asset managers have become more cautious in their development of new ESG and sustainable strategies because of greenwashing accusations and uncertainty around regulations.' The European Union's Sustainable Finance Disclosure Regulation is still under review. Managers are also assessing the impact of the European Securities and Market Authority fund-naming guidelines. In terms of names, Morningstar notes saw a surge in activity from 2019 to 2022 as managers added ESG-related terms to fund names. But this has since given way to the new trend where ESG terms are dropped or changed. In the first quarter of 2025, about 335 funds with ESG terms in their names were rebranded, including 206 which changed an ESG term for another; 116 funds dropped ESG terms in the fund names altogether. Morningstar estimates that in total more than 640 European funds with ESG-related terms in their names have rebranded. The most popular new descriptor is 'screened'. New words also emerged to replace contentious terms such as selected, committed, tilt and optimsed. MSCI itself has removed the terms ESG and impact from five of its indices in response to tightening greenwashing regulations. Going forward The way forward for investors is far from simple, and hence, it may well make sense for some to hit the pause button on allocations into sustainable funds. Various surveys continue to show a desire to invest sustainably among younger investors, but there is arguably a greater need to more careful define their objectives and expectations of returns. In a sobering paper, the Cambridge Institute for Sustainability Leadership said the financing gap for climate and sustainability targets remains as pressing as it has ever been. It notes there is the opportunity to unlock US$10 trillion of opportunities in investment, lending or insurance. 'But, after decades of aspiring to fulfil sustainability ambitions, the current financial system is still not incentivised to consider sustainability in financial decision-making, and therefore not set up to support this transition,' the report's authors Neena Seega and Eliot Whittington wrote. 'There are no capital charges on unsustainable activities because the current capital framework is not intended to protect the broader economy from wider climate and nature risks. As a result, there is no incentive to exit stranded assets if they are rent bearing in the short term. And because there is a market failure to price the true cost of economic activity, climate-negative and nature-degrading activities make more money than sustainable activities, directing private capital towards anticipated profits.' RepRisk, which provides reputational risk data, finds an overall decrease in greenwashing cases in 2024 for the first time in six years, but high-risk cases of greenwashing surged by over 30 per cent. Severity is defined in terms of the consequences of the risk incident; the extent of its impact; and the degree to which the incident was intentional and systematic.
Yahoo
16-05-2025
- Business
- Yahoo
Young investors can see through the smoke and mirrors of the anti-ESG movement
Environmental, social, and governance (ESG) investing is heading for a resurgence among younger generations, despite the best efforts of the growing anti-ESG movement. By considering ESG factors in financial decisions, ESG investing aims to protect investors from the risks associated with unsustainable business practices. Simultaneously, ESG investing has been promoted as a way to achieve socially beneficial outcomes for all. However; some US states, like Florida and Texas, are seeking to ban ESG investing, citing fiduciary duty and anti-boycott laws. But despite this shift, sentiment towards ESG remains strong among younger generations. These youthful investors recognise the long-term viability of these practices and desire the positive social outcomes they promise. At its core, ESG investing is simply integrating environmental, social, and governance considerations into financial decision-making. Asset managers and pension funds will analyse companies' ESG credentials—such as climate resilience, diversity, equity, and inclusion (DEI) policies, and transparent accounting processes—to determine the long-term feasibility of an asset. There are two intended outcomes: funds are protected from the risks generated by unsustainable or socially irresponsible investments, and environmentally and socially 'good' outcomes are achieved for everyone to enjoy. ESG investing has faced massive challenges over the last few years, particularly from the anti-ESG movement. This is a coalition of actors that oppose ESG investments, regulations, and company policies for various reasons, including ideological differences and vested interests in traditional industries. Right-wing lawmakers in the US are the driving force behind anti-ESG pressure. One way that they exert pressure is by attempting to ban pension funds and asset managers from considering ESG concerns. These politicians argue that, by aiming to produce socially good outcomes for everyone, ESG investors are not acting in the best interest of their clients, meaning that they are failing in their fiduciary duty. They also accuse ESG investors of violating antitrust and anti-boycott laws by allegedly conspiring against fossil fuel companies. Some lawsuits based on fiduciary duty and anti-boycott rules have been successful. Several US states, including Florida and Texas, have made moves towards banning ESG investing. This represents a significant hurdle for the sustainability and progressive value in financial services, potentially derailing the investment strategies of public funds and asset managers. Despite these setbacks, positive sentiment towards ESG investing is re-emerging, particularly among the young. Polling from GlobalData Strategic Intelligence throughout Q1 2025 assessed sentiment towards corporate ESG. When asked the primary reason why a company should set up an ESG performance plan, more respondents cited pressure from investors than pressure from consumers for the first time since polling began. A 2025 survey by Morgan Stanley found that 99% of Generation Z respondents and 97% of Millennials report that they are interested in sustainable investing. Approximately 70% of each group took this further, saying they were "very interested". Clearly, ESG concerns are still prominent in the investment landscape. The favourable stance of younger generations towards ESG investing is entirely rational. Given the likelihood of increased regulations and the tangible effects of climate change within their lifetimes, non-ESG investments could become unviable, potentially reducing their value significantly. Similarly, younger investors are more likely to desire the socially good outcomes that the anti-ESG movement claims violate asset managers' fiduciary duty. Not only are young people often more liberal and idealistic, but these generations will face the devastating consequences of climate change and ecosystem collapse. Despite the current climate, ESG investment is poised for growth, driven by a generation that looks beyond short-term gains towards sustainable prosperity. "Young investors can see through the smoke and mirrors of the anti-ESG movement" was originally created and published by Verdict, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
