The politicisation of the environmental, social and governance (ESG) movement in the United States has led to many businesses and investors wiping “ESG” from their policies and websites. But despite the change in lexicon, the fundamentals of ESG as a financial practice are forging ahead anyway.
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Investors aiming for return never relied on Washington for its conviction in sustainability. Incorporating material ESG factors into the investment process matters because it can maximise financial return by reducing risk and operning up value creation opportunities.
Change the label, keep the strategy
Some companies never used the term ESG publicly - even before the election of Donald Trump as US President. They treated sustainability as standard business practice: a way to manage risk, strengthen operations, and safeguard long-term value.
Especially in the US, those that use ESG to describe their investment or business will soon drop the term, if they have not done so already.
In the weeks leading up to Trump’s 2025 inauguration, all six of the largest US banks - including JPMorgan, Citigroup, and Goldman Sachs - withdrew from the Net-Zero Banking Alliance.
Around the same time, BlackRock and others came under legal scrutiny: in November 2024, Republican state attorneys general filed a lawsuit accusing BlackRock, Vanguard, and State Street of “weaponising” finance to advance a climate agenda.
But their internal strategies seemingly stayed intact. They reframed climate-aligned investments as “energy security.” They prioritised “risk management” over ESG branding.
The marketing changed. The fundamentals remained.
Political blowback refocused the market
Trump’s moves triggered a market shift - not a retreat.
By gutting ESG rules, the administration removed US government guardrails. That move increased exposure for investors, who no longer enjoy federal enforcement as a safety net.
Rather than accept higher risk, many strengthened internal governance controls. Investors raised expectations on the funds and companies in which they invest, such as prioritising the board oversight of a company. They brought the “G” into sharper focus.
This increasing focus on governance is not only happening in the US. In Southeast Asia, market-driven sustainability continues to grow.
The SVCA and Amvesindo’s Maturation Map report, released in April 2025, makes this clear. With over US$38 billion deployed in the region since 2020, private capital sets the tone - strengthening due diligence, deploying AI-driven compliance tools, and establishing tiered governance standards across company life cycles. High-profile governance failures may have captured headlines, but the broader trend of deepening discipline and growing collective resolve accelerates.
While private capital firms in the Asia-Pacific may have formally instituted ESG policies to comply with US and EU regulation, most regional firms never anchored their responsible investment strategies on foreign regulatory frameworks. Human rights, climate resilience, and social license impacting financial outcomes drove that practice. Those factors still shape business decisions - regardless of who sits in the Oval Office.
Investors refuse to capitulate
Markets continue to channel capital toward sustainability. Over the past decade, US ESG funds have attracted more than US$130 billion in inflows, according to CNBC, while total fund assets reached US$344 billion by the end of 20242 - driven by performance gain, as reported by Morningstar.
While some managers adjusted product offerings in response to political heat, overall investor interest stayed high.
According to Morgan Stanley’s 2024 Sustainable Signals report, 84 per cent of individual US investors expressed interest in sustainable investing.
Sustainability doesn’t serve as a feel-good strategy. It protects portfolios. Jennifer Coombs, head of content at the US Sustainable Investment Forum, said it clearly: “This is investing - not philanthropy.”
Companies that improve water usage, reduce emissions, and strengthen supply chain resilience outperform over time. Companies neglecting sustainability underperform peers because risk accumulates.
Private capital doubles down
Private markets lead the next evolution of responsible investment. Private equity through venture capital and infrastructure general partners understand that their investors recognise the business imperative to pursue long-term resilience. They factor climate and governance into underwriting. They help portfolio companies reduce exposure to environmental, legal, and reputational risks. They call it risk-adjusted investing.
In doing so, they achieve what all investors aim for: value creation aligned with operational improvement.
This market-led approach sidesteps political noise. It refocuses ESG where it started - inside business strategy.
ESG won’t vanish - it will mature and be called something else
Trump’s attacks on ESG triggered public retreats and hasty rebrands. But investors didn’t abandon the underlying strategy. They sharpened it. They deepened their commitment - quietly and strategically.
As Aron Cramer, CEO of sustainability consultancy BSR, says: “Business leaders and investors recognise that as climate change continues to accelerate and new technologies reshape every aspect of society, the economy will not work for as many as it once did. Businesses that meet these new challenges from a risk prevention and opportunity creation perspective will generate the greatest opportunities for returns on investment.”
No one can kill the underlying principles of ESG because it was never initially about politics or achieving a policy outcome. Unfortunately, ESG became equated with “wokeness”. Ironically, Trump may have helped ESG by forcing it to evolve.
In doing so, he removed the political spotlight and returned the conversation to where it matters most: performance, risk, and long-term value.
Those at the forefront of what used to be called ESG continue focusing more attention on business value, measuring financial impact and promoting innovation.
Whatever you call that attention to risk mitigation and value creation – ESG, responsible investing, sustainability or resilience – does not matter. Investors will always align capital to match with those who employ that strategy.
Steven Okun is CEO of APAC Advisors, a consultancy focused on both geopolitics and responsible investing. Megan Willis is senior advisor and Noemie Viterale is an associate at APAC Advisors.
