Many big businesses and financial groups have been ditching the ESG and DEI labels to avoid, as this article puts it, “the political heat.” Will this change stick, or will these three-letter ideologies simply rebrand and reappear?
From Yahoo Finance. Big businesses keep backing away from “ESG” and “DEI” as the political heat around these buzzwords mount in an election year.
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Companies are reducing their involvement in a high-profile climate group; talking less about environmental, social, and governance (ESG) concerns on earnings calls; and paring back new hires devoted to diversity, equity, and inclusion (DEI) in workplaces.
The latest retrenchment came last week when financial giants JPMorgan Chase (JPM), State Street (STT), and Pimco all pulled out of Climate Action 100+, a coalition formed in 2017 to encourage companies to reduce their emissions.
BlackRock (BLK), the world’s largest money manager, also ended its US involvement with the group. …
The moves followed a wave of political pressure on the climate coalition, with House Judiciary Committee Chair Jim Jordan (R-Ohio) even issuing a subpoena.
In a statement, Jordan called the withdrawals “big wins for freedom and the American economy, and we hope more financial institutions follow suit in abandoning collusive ESG actions.” …
A shift on multiple fronts
Companies are shying away from ESG and DEI in other ways. One has to do with what they discuss on their quarterly earnings calls with analysts.
A recent analysis from FactSet found that mentions of ESG on S&P 500 earnings calls were set to reach new lows this year compared to earlier in the decade. Direct mentions of DEI were even less frequent. …
Another change from companies is that they have slowed their hiring of people with DEI attached to their titles.
A 2023 report from LinkedIn found a surge between 2019 and 2022 in C-suites hiring for DEI-related titles like chief diversity and inclusion officer. The growth was largely seen as a response to the global protests against racism and police brutality. …
But the study also found that the tide has more recently ebbed, with these roles experiencing a 4.5% decline in 2023.
Another recent look at the subject from employment data provider Live Data Technologies found that chief diversity officers were more vulnerable to layoffs and experienced higher turnover in recent years. …
A political fight that may only increase
The step back by corporate America comes as political fighting over these topics is expected to increase.
A new poll released Thursday from left-leaning group Unlocking America’s Future found that American voters are largely unfamiliar with terminology like “ESG” but responded very positively to terms like “responsible companies” (78% favorability) and “sustainable business practices” (73%).
The takeaway, says Kyle Herrig of the group, is that anti-ESG forces “have misread the American people with their attacks.” He added that pro-ESG forces should use the new data to go on the offensive against the ongoing Republican efforts on the other side. …
Although this is good news, the fight against these three-letter agendas is not over. Share this article to encourage others to pray against DEI and ESG.
(Excerpt from Yahoo Finance. Photo Credit: Frugal Flyer on Unsplash)