With the decline in protests, large financial funds are shedding the "green" mask

In the United States, for the second year in a row, the pressure from shareholders of large multinationals in favor of resolutions has weakened in defense of the environment and social rights.In particular, the support from large financial funds for the so-called ESG sustainability criteria is disappearing.These data are reported by the responsible investment association ShareAction, which he highlighted that corporate sustainability support averaged around 20% in 2022, well below 2021 levels.As of 2024, only two shareholder resolutions related to environmental policies have received support from the shareholders of major publicly traded U.S. companies.Both proposals have pushed companies to provide more public information about their efforts to reduce greenhouse gas emissions.In essence, except for a few sporadic cases, the large financial funds seem to do just that are throwing away their "green" mask, the same one worn when the environmental protests of a few years ago kept media and political attention alive on ecological issues.Now that the spotlight is mostly on elsewhere, the big names in finance are instead serenely returning to supporting the usual convenience sectors, demonstrating how the alleged interest of the financial elites in the environmental consequences of investments was superficial.

In detail, in 2022 the world's four largest asset managers – Vanguard, Fidelity Investments, BlackRock and State Street Global Advisors – reduced their support for shareholder proposals related to environmental and social issues, supporting only 20% of resolutions ESG, compared to 32% in 2021.A global analysis of the vote of 68 major asset managers on 252 shareholder proposals focused on emissions-related or social challenges found an overall increase in support for such resolutions, from 60% in 2021 to 66% in 2022.However, there was a clear regional divide.In Europe, support for environmental and social proposals increased by 12 percentage points, while in the US and UK it remained almost stable with an increase by just one percentage point.The decline in support from Vanguard, Fidelity, BlackRock and State Street, all based in the United States, has for example been influenced by the anti-green stances of energy companies, which have made record profits thanks to the war in Ukraine.BlackRock, for example, supported only 16% of climate-related resolutions at energy companies in 2022, a dramatic decline from 72% in 2021.

ESG – that's the acronym Environmental, Social, and Governance – are criteria used to evaluate company practices and their impact on three main areas:environmental, social and governance, precisely.These criteria, in theory, should help investors determine the sustainability and ethics of a company.However, it seems that they are going through a crisis, as confirmed by numerous indicators.At the end of 2023, for the first time, disinvestments from funds inspired by criteria of respect for the environment and social rights experienced a net outflow of capital.A phenomenon confirmed by the fact that the number of ESG-friendly funds closed has already exceeded that of new funds created.A key role in what it is not risky to define as a step backwards, as anticipated, was certainly played by the recent war recovery, which led to a boom in investments in sectors traditionally at the antipodes of ESG ideals, like that of fossil fuels.Faced with this renewed race for arms and oil, many investors preferred not to risk missing out on these profit opportunities.In the meantime, while the climate commitments made at an international level are systematically disregarded, greenhouse gas emissions continue to grow, as does the consumption of oil and even coal, the most polluting and climate-altering of fossil fuels.Just to name one, a recent one relationship of the Energy Institute revealed that oil consumption exceeded 100 million barrels per day for the first time, while in 2023 CO2 emissions increased again by 2.1%.But nothing will be able to change in the time required to combat the ecological crisis as long as the large impacting companies continue to operate according to the logic of profit maximization, and as long as the shareholders, the only ones with the power to change company policies, do the same.

[by Simone Valeri]