Considering environmental, social, and governance (ESG) factors in investment decision-making has a long history intertwined with broader ethical considerations. From the refusal to invest in businesses involved in morally questionable activities to the recent surge in ESG-focused investments, the landscape of conscientious investing has evolved significantly over time.
The term “ESG” gained traction following a 2005 study and has since become a mainstream topic in corporate boardrooms and investment circles. The influx of billions of dollars into U.S. sustainable-designated funds in 2021 demonstrates the growing significance of ESG criteria in investment strategies.
However, the ESG movement has not been without its detractors. In 2022, some political figures labeled it as “woke investing,” seeking to diminish its influence. Subsequently, there have been efforts to challenge and regulate corporate ESG decision-making, particularly among Republican lawmakers.
Despite initial resistance, recent surveys have shown a potential shift in attitudes towards ESG investing, particularly among younger investors. A notable decrease in support for ESG initiatives among certain demographic groups highlights a nuanced change in sentiment.
While the majority of younger investors still hold a favorable view of ESG-related policies, the observed decline in support warrants attention. Should this trend persist, it could signify a marked reversal in the attitudes of the younger investing public, potentially impacting the trajectory of ESG investing.
Market Capital Research 