Anti-ESG sentiment in US could spread to Europe

February 16th, 2024

Opposition to ESG investment in the US could reach Europe, Norges Bank Investment Management (NBIM) CEO Nicolai Tangen has warned.

Anti-ESG sentiment has been on the rise in the US in recent years, and this trend could spread to Europe, Tangen said in the firm’s press conference on its responsible investment 2023 report.

NBIM is the in-house manager of Government Pension Fund Global, Osla, the $1.53 trillion sovereign wealth fund.

Tangen said: “We are seeing [ESG backlash] coming to Europe, but we are probably seeing it more in the UK. It's really worrying.

“We are also seeing a lot of large shareholders worldwide being less supportive of shareholder resolutions and voting differently than have done in the past.”

He added: “What we do and the views we have are well anchored in the Norwegian parliament and in our expectation documents, which have been through the political processes in this country.

“We [divest from high emitting companies] because we want to make money. If we have one company polluting in one part of the world, the other companies we invest in that do business there are affect and it hurts their returns, so there is just no place to hide when you are a large shareholder like us.”

Compliance officer Carine Smith Ihenacho also spoke about the trend: “We are concerned with ESG backlash when it becomes political because we see ESG as a way to manage risk.”

However, Ihenacho was optimistic that the rising anti-ESG sentiment does not currently seem to be impacting companies directly.

She said: “Companies do not seem to be that affected by it, we have seen great progress on many material ESG issues on a company level such as setting targets and creating climate transition plans.

"It seems to be a discussion that is happening outside of what’s happening within the companies, but that is in itself concerning.”