The global retreat from ESG, driven by political pressure and fear of scrutiny, risks prioritising short-term gains at the expense of long-term client value and economic resilience.
Across asset management, we are witnessing a trend where proclamations of sustainability or net-zero commitments are being scrubbed from marketing materials. To some, it seems sustainability was a convenient pastime that has now run its course.
While greater accuracy in ESG claims is long overdue, should we be concerned that the backlash against sustainability is ushering in a new era of ‘anything goes’? Are asset managers quietly abandoning efforts to promote enduring economic prosperity – through action on climate change, biodiversity, or effective and accountable governance – simply to avoid unwanted scrutiny from anti-ESG campaigners?
There is evidence to suggest that the pullback from ESG commitments is more than cosmetic. ShareAction’s latest review of asset managers’ voting in 2024, support for shareholder resolutions on environmental and social issues hit an all-time low. Just 1.4% of resolutions received majority support, compared with almost a quarter in 2021.
The problem with a short-term, self-preservation approach by asset managers is that it risks sowing the seeds of long-term client harm. The fundamental forces shaping our world – climate change, harmful social trends, and the need for good governance – have not gone away. If anything, they are intensifying.
Against this backdrop, our stewardship philosophy – which underpins Sarasin Responsible Global Equity and all of our funds – remains firm.
Our long-term ownership mindset is rooted in the understanding that the world is interconnected. Activities that prosper by imposing uncompensated costs on others degrade the system, ultimately undermining future prosperity. We believe that investing in ways that support society, rather than harm it, offers the best path to long-term financial performance and better outcomes for our clients.
This does not mean every investment is perfect from a stewardship perspective. What’s critical to our approach is engagement – with companies and other stakeholders – to support sustainable behaviour while challenging harmful practices.
Please visit the dedicated Stewardship section of our website to learn more about our engagement efforts, policy outreach, and how we use our vote to make a difference.
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