Most Americans aren’t familiar with the ESG investment movement, which uses its financial resources as a cudgel to coerce companies into compliance with Environmental, Social and Governance ideology, at the expense of profits, a new Gallup survey shows.
By denying investment and capital to companies and industries they oppose politically, ESG-activist fund managers and financial institutions are able to exert influence in pursuit of objectives irrelevant to return on investment. Still, as the Gallup poll reveals, most Americans are unaware of how ESG might be affecting them.
Slightly more than a third (37%) of adults (18+) are at least “somewhat familiar” with ESG, unchanged from two years earlier, Gallup reports. Meanwhile, 62% aren’t familiar with it, including 40% who know nothing about ESG.
Six in ten (59%) have “no opinion” of ESG, while the opinions of those who do are evenly split between positive and negative views.
“Many may simply not be cognizant of the public discussions and debate about ESG, as much of this is reported in the financial rather than front page news,” Gallup’s Lydia Saad told USA Today, noting that ESG is "not an intuitive subject that’s easily understood from the acronym or relatable in the context of most Americans’ daily lives.”
Regardless of how well informed they are about ESG, Americans prefer that their fund and retirement account managers base their investments solely on financial factors - not environmental, social and governance goals. Of those with an opinion on the issue, about 54% say they want to invest based only on financial factors.
By more than two-to-one, Republicans want profit potential to be the only determinant (64%-24%). Independents also favor the profit-only investment strategy (49%-41%), but Democrats want to factor in ESG ideology, by a margin of more than two-to-one (59%-28%).
However, a separate study reveals “broad agreement” that using ESG as an investment consideration presents financial risks, The Wall Street Journal reports:
“The poll of 602 registered voters who invest in stocks, conducted by Pennsylvania State University and public-affairs firm Rokk Solutions, found broad agreement that several concepts associated with ESG, including conservation and energy management, could affect their portfolios.”
And, even though they’re much more likely to support ESG investing, only 39% of Democrats are willing to actually “risk a financial hit by investing in firms with strong ESG principles,” The Wall Street Journal article notes.
Indeed, as USA Today reports, billions of dollars are pulled out of ESG investments and moved to non-ESG funds during periods of financial uncertainty:
“When market volatility rose in the first three months of the year and led people to refocus on protecting their money, ESG exchange-traded funds saw an outflow of $6.46 billion compared with $3.32 billion of inflows a year earlier, FactSet data showed. Meanwhile, non-ESG equity ETFs recorded inflows.”
“The most overriding factor for all investors is returns, however. ‘ESG considerations are secondary,’ Saad said in February when a Gallup poll in November showed 78% of investors think a lot about the expected rate of return when choosing which companies or funds to invest in, compared with about 40% who consider ESG.”