Not long ago, ESG — shorthand for environmental, social, and governance investing — was the darling of global finance.
From pension funds to private equity, investors poured money into companies promising climate action, social responsibility, and better corporate governance — and between 1995 and 2018, sustainable investments in the U.S. grew more than 18-fold, eventually accounting for one in every four dollars of the country’s $46.6 trillion in assets.
But over the last several years, support for ESG began to wane. In 2022, leading conservative politicians accused corporations of investing in “woke capital” through ESG, with Florida Gov. Ron DeSantis proposing sweeping legislation to shutter “ideological corporate power.”