Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

Why investors aren’t going green, despite calls for sustainability

Being environmentally friendly is important, but because of the pandemic, looming recession, and elections, going green is glowing red.

box with going green initiatives printed on side

Ever wonder what the challenge is with going green? 

During the first half of this year, ESG investing was one of the most cited phrases in earnings calls among companies using environmental and social factors. Unfortunately, problems like the recession, stock markets tanking, and US midterm elections have put sustainability efforts on the back burner for many companies. 

The rapid increase in ESG fund investing has now stopped completely, according to a Refinitiv analysis provided by CNN Business.

ESG funds in September saw their largest outflow of investor cash since the beginning of the recession in March 2020. Additionally, these ESG funds saw assets under management go above $8.5 trillion in 2021. Now, they pool at under $7 trillion. 

Advertisement. Scroll to continue reading.

All of the issues, combined with a rainy forecast as far as the economy goes, have put efforts toward going green at a halt. A not-so-appealing mix of problems makes it hard for businesses to stay ESG-friendly. 

Have you ever thought about the term “greenwashing?”

It’s a term that US politicians and business leaders use to accuse companies of making themselves look more environmentally friendly than they really are. This creates a false promise to consumers that they’re actually making sustainability efforts to gain trust and business. Firms like DWS and Goldman Sachs have lately been accused of using the ESG label under false pretenses. 

The ever-so-publicized Elon Musk even made claims of ESG being a scam on Twitter, referring to Tesla being removed from an S&P ESG index, which has a documented history of damaging the environment. 

On top of that, a growing movement of the political right in the United States has begun, steering away from asset management firms that invest and vote with ESG values in mind, entirely. Elected officials in red states have voiced their distaste for the “values” they claim these funds promote, claiming that they’re not what they claim themselves to be. 

Advertisement. Scroll to continue reading.

The debate over how to regulate ESG funds is also adding to this confusing picture. Experts say standardizing ESG criteria will alleviate investor hesitation, but the current fight to do so is actually making things more challenging. 

The hurdles facing ESG investing prove that addressing this issue is easier said than done, especially with the looming difficulties business owners are facing.

Macie LaCau is a passionate writer, herbal educator, and dog enthusiast. She spends most of her time overthinking and watering her tiny tomatoes.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business Finance

(FINANCE) First impressions are everything, and it's no different when it comes to approaching investors. We have the tips to win them over.

Business Finance

(BUSINESS) Venture capitalists eyeball booming industries while salivating, but one niche is being ignored. Why is that?

Business News

Show me another car manufacturer that can generate those kinds of numbers on pre-orders for a car sight-unseen and I’ll show you a brand...

Opinion Editorials

When you choose to be more environmentally conscious, it should develop beyond a mere trend; it should become a way of life. If you’re...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.