Not Done, Just Different: ESG’s Evolution, Durability and Direction

This spring the State of Texas removed asset management firm BlackRock from a “divestment list” that had banned state public investment with the firm.

BlackRock had spent three years on that list due to ESG policies Texas claimed “boycotted energy companies”. BlackRock was restored to the good graces of the Lone Star State by stepping back from the Climate Action 100+ group and loudly backtracking from related positions.

The same policy reversals that helped BlackRock get back into Texas sparked issues abroad, as a major Netherlands pension fund then pulled $17 billion in assets from the company. The fund, PFZW, expressed concerns BlackRock wasn’t acting in the best interests of clients when it comes to climate risk.

Meanwhile this summer more than 20 US states warned BlackRock and JPMorgan that “woke investing” environmental programs will jeopardize the investing giants’ access to those states. In issuing these warnings, states called on the firms to completely abandon ESG goals.

Any discussion of the current state of ESG for US businesses should acknowledge that the ideological whiplash around the topic isn’t new. Well before the current Trump administration there were endless debates on if and how the private sector should engage on such broad societal questions.

Should Acme Widgets accept a role in slowing climate change or driving gender equity, even if it meant shipping fewer widgets next quarter? At the time the idea seemed to go against the 1990s dogma of measuring added shareholder value down to the economic return on each office chair or file cabinet.

Yet many companies still loudly pursued ESG, and for many reasons. Sometimes ESG engagement was driven by regulatory or shareholder pressures, sometimes from employees or customers. And yes, sometimes ESG policies were pursued by boards as the right thing to do: the cost of doing business on planet earth.

That history is important because regardless of why companies engaged with ESG, we now have decades of data showing how and where ESG ideas and bottom-line business metrics can converge. The recognition that purpose and profit can co-exist informs much of the relevant activity underway now, even if boards may be a bit hesitant about shouting it from the mountain tops.

As BlackRock illustrates, many companies have trimmed back both their ESG engagement and the way they talk about how their efforts have evolved. Sometimes the shifts come from a fear of political and social blowback. But other times, companies drop ESG because it was never an authentic part of their operation or culture, and the current moment comes as a relief.

It wasn’t necessarily a surprise to see brands such as John Deere, Wal-Mart or even Ford move away from DEI, for instance. Similarly, it was on-brand for Apple, Ben & Jerry’s and Patagonia to re-state their commitment to their DEI policies.

In many ways we are currently seeing two different forms of ESG in the US. There is ESG as the loud political Rorschach test, with right and left both seeing what they want to see and claiming endless evil or boundless good in programs. Then there is the actual less-loud work being done: ESG as business strategy. Some are calling it “ESG 2.0” but that may overstate how planned the path has been.

In any event, where ESG is still taking place under the term “ESG”, many companies have shifted away from declarations of social transformation in favor of introspective work on risk/change management. The scope of ESG has narrowed as the social pressures and economic incentives have flipped. Companies must now avoid anti-woke boycotts from the right while dealing with the end of tax credits for EV’s and clean fuels.

Today’s ESG in the US is more likely to include business-impact questions around current-era sustainability concerns, including AI adoption, trade chaos and global politics. Less common are highly visible commitments to causes outside of a P&L. For instance, directors are more likely to consider insurance ramifications from rising sea levels or storm frequency vs. taking a position on the Paris Accords.

Communicating during this shift doesn’t mean casting all efforts in a pure mercenary business framework. As always, any message must be authentic to an organization’s history, foundational brand attributes and established culture.

Additionally, as the BlackRock challenge in the Netherlands illustrates, even as anti-ESG pressures rise in the US, the global picture is much different. Companies who do business internationally (or who aspire to), would do well to think twice before any wholesale abandonment of ESG. Decisions made to appease domestic regulators could spark unintended problems with three others in another hemisphere.

Indeed, the global push toward standardized ESG/ climate reporting is only accelerating. According to a report earlier this year from risk data company Navex, bodies like the International Sustainability Standards Board are working to create a unified baseline for global disclosure. Navex also adds that at a global level corporate leaders increasingly view ESG data infrastructure (analytics, real-time monitoring, scenario modeling) as essential, not optional.

Within the US itself however, we are unfortunately seeing polarization accelerate among states, as some embrace “greenhushing” legislation discouraging climate reporting or consideration. Meanwhile California and New York have pursued legislation mandating greater corporate disclosure of emissions and climate risk. These increasing pressures are a critical reminder to companies and communicators that despite the biggest headlines, all politics remains local.

While it is easy to get caught up in the whiplash of ideology and politics when discussing ESG, the components that drive demonstrated organizational growth remain durable. A 2025 CFO survey by BDO USA showed 44% of CFOs plan to increase ESG investments while only a small minority expect to reduce related investments. This data would suggest there is a business case for the “why” around ESG.

In the US today, the foundational messages around ESG have shifted inward to business growth versus global responsibility. But companies and professionals communicating different aspects of ESG should ensure, first and foremost, their message is going to age well and travel well in support of their brand and their culture, regardless of who holds what future political office.

Just as early predictions of ESG’s eventual ubiquity were wrong, so are any current predictions of its demise. Even in Texas.