US sustainability funds — ‘woke capitalism’ — saw their worst year on record in 2023, with investors pulling $13 billion from US funds, a Morningstar report says. That multi-billion dollar exodus in the US more than offset the inward flows seen in Europe, dragging down the market globally.
In the fourth quarter alone, investors withdrew $5 billion from funds that promote environmental, social, and governance (ESG) efforts, making the fifth straight quarter of net outflows, the report says.
According to Morningstar, a financial services firm, investors exited ESG amid fears of poor returns, a hidden leftist agenda, and ‘greenwashing,’ or making a firm appear more environmentally friendly than it really is.
Manages of funds following environmental, social, and governance (ESG) principles had a brutal year in 2023
Manages of funds following environmental, social, and governance (ESG) principles had a brutal year in 2023. Investors pulled $13 billion from ESG funds in the US last year, a Morningstar report says
Investors pulled $13 billion from ESG funds in the US last year, a Morningstar report says ESG refer to standards to guide investment toward socially-conscious firms — for example, by funding wind farms to combat climate change, while pulling out of harmful oil and tobacco giants.
The strategy gets more controversial when it guides funding to firms promoting diversity, equity, and inclusion (DEI) schemes, which irk conservatives, who say they help women and minorities by sidelining white men.
This has spawned a fractious debate about whether efforts to make society fairer and cut carbon emissions are in the strategic interest for investors, by mitigating the risks of climate chaos and social disorder.
Alyssa Stankiewicz, a sustainability researcher at Morningstar, said ESG investments faced strong macroeconomic headwinds last year.
Global supply constraints, Russia’s invasion of Ukraine, and high interest rates left renewable energy firms less profitable.
Blackrock to TERMINATE approximately 600 employees, mainly from their ESG division. After losing management of ONE TRILLION dollars in 2023 and tremendous public backlash, Blackrock, the world’s largest money management firm, plans to announce layoffs in the coming days of about 3 percent of its global workforce, Fox Business has learned.
ALSO, for the first time, and in what may prove to be a precedent-setting case, a global asset manager is being sued for allegedly leveraging investors’ money to pursue political goals.
Tennessee Attorney General Jonathan Skrmetti filed a lawsuit against BlackRock, charging that the firm “has been on the forefront of using aggressive strategies to push controversial environmental, social, and governance (ESG) goals across the assets it manages.”
“We want BlackRock to let investors know how their money is going to be managed,” Mr. Skrmetti told The Epoch Times. BlackRock must inform investors, he said, “if their money is going to be managed in a way that furthers ideological ends.”
ESG was never supposed to work for investors, it was created to push a broken progressive agenda. The bad year that a lot of ESG investors are having may be about to get even worse. The green correction — with the S&P Global Clean Energy Index down more than 30% over the past year — has “definitely shaken some investors within ESG impact sustainability,” Penny said in an interview. It’s “definitely been a tough time to be invested in thematics in sustainability.”
This was supposed to be the year that investors targeting environmental and social goals would see their assets buoyed by historic support packages, such as the US Inflation Reduction Act. Instead, decades-high inflation and soaring interest rates ended up hammering a lot of traditional ESG stocks, with wind and solar standing out as some of the biggest losers.