PitchBook News - The politicization of ESG

In 2021, only 9% of respondents said they have no plans to incorporate any sustainable investment work. That number jumped to 13% this year.

When allocators were asked if they evaluate a fund manager's implementation of an ESG risk factor framework as part of their due diligence process, 22% said they have no plans to do so—up from 15% last year.

So, are the numbers of anti-ESG individuals truly growing? Are they convincing last year's supporters to shift?

I have my doubts.

Even going back to the first of these reports two years ago, I suspected that those who had taken the time to respond to this lengthy survey were those passionate or positively interested in learning more about the subject.

We now appear to be attracting a broader audience to our survey as those supporting anti-ESG initiatives, particularly in the US, feel compelled to register their views when they might have skipped the survey in years past.

Our North American LPs, in particular, grew their proportionate representation in the negative camp, but in absolute numbers, those in the highly positive camp have also grown in our survey responses.

Attempting to represent various sides of the debate, as many look for a survey to do, we have always included quotes that represent both positive and negative thoughts about the sustainable investment landscape.

This year, we had a much greater selection of negative open-ended responses to choose from.

In 2020, one person felt the need to register extremely negative views on the topic. This year, there were roughly 50 who did so.

But in terms of overall responses, these are still a minority who are becoming more vocal.

I do not believe that this survey shows an indictment of sustainable investing. The numbers show continued support for the topic, even in the face of a pandemic, social movements, and financial stresses.

The negative views expressed were often stated in repetitive soundbites, not reasoned arguments.

This leaves hope for those with a deeper understanding of the movement that education might sway those who believe it is all—to use the words of some of our respondents—just a bunch of woke socialistic virtue signaling.

To see the full survey data and our analysis, click to download our 2022 Sustainable Investment Survey.