Corporate America retreats from climate-conscious investing amid Republican attacks
Once a rising force in finance, ESG investing has become a political target, leading major firms to abandon climate pledges and prompting investigations into potential antitrust violations.
Steven Mufson and Tom Hamburger report for The Atlantic.
In short:
- A coordinated Republican-led campaign, funded by figures like Leonard Leo and backed by groups such as Consumers’ Research, has driven a sharp rollback of ESG (environmental, social, and governance) investing in the U.S.
- Major financial institutions — including BlackRock, Vanguard, JPMorgan, and State Street — have scaled back climate-related initiatives under pressure from state officials, legislative actions, and federal investigations.
- The political push has had economic consequences, with states like Texas incurring hundreds of millions in extra interest payments after cutting ties with ESG-focused banks.
Key quote:
“This has been a silent spring. Investor initiatives on climate, which attained broad shareholder support in the past, are barely present.”
— William Patterson, former director for investment for the AFL-CIO
Why this matters:
The collapse of ESG investing threatens to derail efforts to align global finance with environmental sustainability. ESG funds once helped steer trillions toward cleaner energy, corporate accountability, and climate transparency, encouraging companies to reduce emissions and disclose pollution data. Now, a growing backlash — rooted in fossil fuel interests and political ideology — is undermining those gains. With banks pulling out of climate coalitions and shareholder activism in retreat, investment decisions are increasingly decoupled from climate risk. The result is a resurgence of fossil-fuel backing in the financial system, just as heat records shatter and extreme weather intensifies.
Read more: Trump’s energy secretary seeks to curb climate-conscious retirement investing
