En January 2020, BlackRock, the world’s largest asset manager, announced a major change in its strategy. The company was then a pioneer in the integration of environmental, social and governance (ESG) responsibility criteria, criteria that no one can ignore these days.
But, since mid-2022, the American giant has started to backpedal. There is no longer as much consensus on commitment to the fight against climate change as in the aftermath of the pandemic. Across the Atlantic first, political and social reluctance has increased in recent years, like West Virginia, whose Congress has taken measures to restrict the use of ESG criteria in investment decisions. . Venture capital funds, although once at the forefront on the subject, are now also backtracking. However, the United States is an excellent laboratory for anticipating what could happen in Europe. The return (backlash) ecological is on the move, and European companies have a major role to play in standing up against this turnaround.
In the United States, while certain states have pursued ambitious ESG policies, resistance has come from the conservative camp. Wind rising against measures that they consider unfair and destructive, the Republicans were the first to seize the anti-ESG discourse. At the heart of the BlackRock controversy, Republican senators have made vehement criticisms, notably those from oil and coal-producing states (West Virginia, Pennsylvania, Kentucky, Montana, North Dakota, Ohio, Indiana, Virginia, Alabama), qualifying the approach as “market manipulation”. Only a few free electrons escape the condemnation of ESG, like California, where two new laws were adopted – Senate Bill 253 and Senate Bill 261 – which require companies operating in its territory to disclose their emissions and their risk management climate-related finances.
On the European side, regulators were not afraid of this “woke capitalism” denounced in the United States. The European Commission established the Corporate Sustainability Reporting Directive (CSRD) which introduces the principle of dual materiality, requiring companies to take into account their impact on society and the impact of ESG criteria on their activities. Europe can thus assert its broader and in-depth vision of ESG issues.
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