The ESG Report
US-focused ESG professionals find themselves in a difficult situation right now. On the one hand, state legislatures are attacking ESG programs for pegging what they see as liberal ideals onto their investment programs and risking encroachment on returns.
Meanwhile, regulators are pushing for greater accountability on stated ESG goals. It’s not enough to just say you care about the environment or make a beautiful social media campaign with all the right hashtags anymore. In fact, it could be harmful to make empty promises and statements supporting these principles, because what firms say in any context could be used against them if they don’t live up to their own hype.
But firms in private markets appear committed to pursuing ESG goals, even if they are being forced to be a bit cleverer about how they go about it. As one panelist as PEI’s recent Responsible Investment conference put it: “ESG strategy is business strategy.”
As pressure mounts, ESG commitments are likely to be brought down to earth, and even downplayed in order to avoid the backlash. But there are still plenty of firm believers in the value proposition of a strong ESG program.
