Anti - ESG backlash in US is overstated , JPMorgan exec says

JPMorgan s global head of sustainable solutions, Chuka Umunna, addressed the impact of a political backlash against environmental, social, and governance (ESG) issues in the United States at the Reuters Energy Transition conference in London. Umunna argued that the backlash is overstated and has little effect on the U.S. s growing green economy. Despite some companies and investors reducing their focus on sustainability, they continue to move money similarly to their European counterparts. Umunna noted that the U.S. is not significantly retreating from ESG due to the weaponization of the term, but rather due to more complex factors. In recent times, U.S.-based investors have distanced themselves from global climate coalitions amid a tense political environment, with some Republican politicians claiming that membership could violate antitrust rules. However, Umunna pointed out that less than 2% of anti-ESG resolutions proposed during the latest proxy-voting season passed, and less than 10% of anti-ESG bills were enacted at the state level. While investment firms may adjust their pitches in Republican states, the large global clients of JPMorgan s fund arm generally adhere to a single investment stewardship policy worldwide. Umunna also highlighted that companies in the U.S. seeking investment or bank loan support face greater challenges from inflation, supply-chain issues, and high interest rates. He questioned whether the noise surrounding the ESG backlash necessarily depresses valuations, suggesting that more fundamental issues are at play. In summary, Umunna believes that the political backlash against ESG issues in the U.S. is overstated and has little impact on the country s burgeoning green economy. He emphasized that companies and investors continue to prioritize sustainability, and the challenges they face are more rooted in economic factors like inflation and supply-chain issues.

Source: marketscreener.com
Published on 2024-10-01

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