GLIN’s stance on the US ESG backlash

In 2023, an “anti-ESG” movement is happening in the United States to oppose companies and investors who incorporate ESG (Environment, Society, and Governance) into their business activities. In this article, we would like to discuss the ESG backlash which has caused confusion in the United States and introduce GLIN’s stance and future policy towards it.

1.Symbolic event

This March, the U.S. Senate adopted a resolution repealing the Biden administration’s investment rules that allow the managers of retirement pension funds to consider ESG factors when selecting investments. The idea behind the resolution was that promoting ESG investment conflicts with the fiduciary duty of institutional investors. (Generally speaking, it is considered that institutional investors should maximize economic returns under their fiduciary duties. Therefore, it has become legally controversial that considering not only economic returns but also ESG factors when making investments violates the fiduciary duties of institutional investors.) President Biden vetoed this resolution and protected ESG at the last minute.

Regulatory revisions regarding ESG investment for corporate pension plans in the United States promulgated on December 1, 2022, changed the negative ESG stance taken under the former Trump administration and stipulated to enable considering ESG factors in judging investments and exercising voting rights when managing corporate pension assets. However, after a joint resolution passed by Congress invalidating it, President Biden was forced to exercise his veto power for the first time since assuming office. As a result, the Democrat Biden administration insisted on promoting ESG and upheld the ERISA law. (Source:


It is a federal law enacted in 1974 in the United States that uniformly stipulates the design and operation of corporate pension plans and welfare programs. It is known as ERISA, which stands for Employee Retirement Income Security Act.

As the ERISA law does not have any specific provisions for investments accompanied by ancillary benefits besides economic returns, it has been a long-disputed issue whether incorporating ESG factors into investment decisions is consistent with the law.

In this way, divisions over ESG have surfaced in the United States, and opinions have continuously differed between ESG proponents (Democrats) and ESG opponents (Republicans), depending on the respective states.

2.Anti-ESG news

As the anti-ESG movement accelerates, a lot of news is shaking the industry. We focus on two much-hyped news articles and introduce our perspective.

The first news article is “BlackRock CEO no longer uses ESG terminology.”

Among financial institutions, there is a movement to refrain from using the term ESG even if they are taking measures in correspondence with ESG (sometimes referred to as green hushing) because of concerns over the reaction of anti-ESG forces. For example, Larry Fink, CEO of BlackRock, the world’s largest asset management company, said that he “won’t intend to use the term ESG anymore.” This seems to be because both hard-line conservatives and leftists “misunderstand” the term ESG and “use it as ammunition for attack.”

We think that people, including professionals working at financial institutions, would not want to use the term ESG if it negatively affects their investment activities. However, observing globally, the United States is the only country where we can clearly see the anti-ESG movement. ESG has been continuously very important in the EU, leading sustainable finance, and it may require disclosure of non-financial information related to sustainability besides ESG products in the near future. Therefore in reality, we often hear that, even though financial institutions in the United States do not use the term ESG in order to minimize the negative impact of anti-ESG movements, they are actually carrying out operations that take ESG into account so as to comply with European regulations.

The second news article is “The U.S. S&P Global suspended ESG scoring of companies, reflecting political division.” S&P Global Ratings, an American credit rating agency, has traditionally incorporated ESG into credit ratings but stopped publishing quantitative ESG evaluations included in credit rating reports.

This announcement was sensational and the company no longer implemented its ratings based on ESG factors but the review of ESG ratings that the company provides is still ongoing Many investors refer to both credit ratings and ESG ratings when deciding on investments, so it may be hasty to assume that “ESG” is no longer taken into consideration because ESG ratings are not carried out in credit ratings anymore.

As we can see from the two reports, press releases on anti-ESG movements sometimes include expressions that evoke the end of ESG. However, we believe it is crucial to grasp what’s really going on and what moves behind it. In the United States, ESG proponents and opponents are evenly split at the level of Congress and states, but conversely, half of the groups have continuously supported ESG. Considering the fact that most of the U.S. companies and financial institutions did not give much consideration to ESG until around 2020, it may be possible to see that they have made much progress in three years, although we have observed some backlashes.

For example, movements such as the state of California recently passing legislation that would mandate companies to publish information on their greenhouse gas emissions, have begun to be seen.

3.GLIN’s stance

Regardless of whether the term ESG remains following the future U.S. political situations, GLIN’s stance on investment activities will remain unchanged. We consider it imperative to incorporate companies’ positive and negative external economic factors and non-financial information in our judgments and evaluations of investments and businesses.

Reason 1

No matter how political trends change or no matter how the labeling of ESG/impact investments changes, the issues of global warming and widening inequality will continue to accelerate accompanied by economic activity expansion, which is the major backdrop to the trend of promoting sustainable finance. Also, the values of Millennials and Gen Z remain unchanged. Regarding environmental issues, in particular, the situation remains the same in terms of which the earth’s resources are limited, and global warming continues to accelerate along with the development of human economic activity. Given this factor, we still need to update how economics and finance are structured in society and how we evaluate and judge them.

Reason 2

So far, GLIN has incorporated ESG/impact perspectives in our investment judgments and evaluations. What we can say from these practices is that it has led to selecting and creating companies that grow sustainably and robustly by judging and evaluating investments based on more comprehensive information including external economic factors and non-financial information, not limited to corporate financial statements. As a result, we believe that this is a better investment and evaluation method than investment decisions that do not take these points into account.

Reason 3

What we, GLIN, are aiming for the mid and long-term is to create an optimum method as a practitioner for “an evaluation and judgment system incorporating non-financial information such as external economic factors,” which has been tried in ESG investment and impact investment methods. We think that ESG investing and impact investing are each just one method and that the terms and definitions should change while the methods are being sophisticated. Our ideal future will be the day when these methods are taken for granted, without even referring to the words ESG/impact investing.

Reason 4

In Japan, where GLIN is headquartered, we have not experienced any ESG headwinds. Rather, we have seen robust following wind. At the PRI in Person 2023, the largest conference in the sustainable finance world, held in Tokyo on October 3, 2023, Prime Minister Kishida delivered an address as the first prime minister-level speaker in the conference’s history. In his address, Prime Minister Kishida stated that it is within the scope of fiduciary responsibility to support the growth of companies working to resolve social issues and transform through investment. He also unveiled that seven pension funds, whose operating funds amount to 90 trillion Japanese yen, are signing up for the PRI.


As mentioned above, even if the term ESG has changed due to the U.S. political situation, our stance will not change in terms of including external economic factors and non-financial information when evaluating companies and deciding on investments and business.

For your reference, we introduce the article regarding the comments of CEOs of Coca-Cola and Novartis similar to GLIN’s stance, which maintains that they will continue to work on what has been conducted in the context of ESG, regardless of whether the term ESG is used.

In today’s financial industry,  ESG/impact investing and sustainable finance methodshave been evaluated based on how well financial returns are produced and whether the method should be continued.

Therefore, GLIN considers we need to steadily accumulate better financial returns through ESG/impact investing.  If we can prove that we produce better returns through ESG/impact investing that incorporates non-financial information into investment decisions, we believe that we can eventually contribute to making ESG/impact investing mainstream.

In this article, we explained how we, GLIN, view the trend of ESG backlash in the United States. In the rapidly changing world, it is our pleasure if this blog post helps somewhat to deepen your understanding of the anti-ESG discussions.