Much of the sustainability movement was born out of an ironically unsustainable sentiment: optimism. In favorable economic conditions with capital to spare, Millennial and Gen Z retail investors demanded environmental and social change. Many were willing to back these demands with dollars. However, the world of five years ago is not the world of today. The optimism driving ESG’s early days has waned under more challenging economic conditions. What is left is pragmatism. Investors are still finding value in ESG, but for different reasons. A recent article from Harvard Business Review explores these trends through years of survey data. They sum up their results stating:
“For executives, boards, and asset managers, the implication is clear: ESG strategies built on presumed investor altruism are fragile. Those grounded in credible risk management and transparent tradeoffs are far more likely to endure. The broader lesson from four years of surveys is not that investors have turned against ESG. It is that they are increasingly treating it like any other investment consideration—subject to constraints, opportunity costs, and changing economic realities. That, in itself, is a sobering but clarifying insight.”
In many ways, this transformation has made ESG more durable. By shifting to concrete risk and opportunity management, investors have found ESG’s financial value. Many thought that the ESG movement would prove to be a fad, and in some ways, the sentiments of its early proponents were just that. While some lost interest, others saw the real value, and those are the investors driving ESG in the current political and economic climate.
Our members can learn more about ESG business value here.
If you’re not already a member, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. But it will probably pay for itself before then. Members also save hours of research and reading time each week by using our filtered and curated library of ESG/sustainability resources covering over 100 sustainability subject areas – updated daily with practical and credible information.
Practical Guidance for Companies, Curated for Clarity.
