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the rise of the anti-ESG movement in the US;  Should Dutch companies be concerned?

the rise of the anti-ESG movement in the US; Should Dutch companies be concerned?

In the United States, companies and investors pursuing sustainability are experiencing increased pressure from politicians. Former Vice President Mike Pence and like-minded people are fighting against 'green' investments, which are actually being promoted in European countries. This difference in approach causes tensions in the financial world. In some US states, companies are already excluded from government contracts if sustainability is a priority.

In the investment world, people often talk about 'ESG' instead of 'sustainability'. The acronym stands for Environment, Community & Governance. This 'anti-ESG' movement – ESG stands for opponents of the green transition – raises questions about the future of sustainable investing and what impact it might have on Dutch pension funds.

Why it matters:

In the United States, political divisions over sustainable investments are growing. What consequences does this have for investors and companies? And will this trend spread to the Netherlands?

Political divisions over climate investments

The political battle in America around sustainable investment is intensifying by the day. Republicans view climate change as a polarizing issue and strongly oppose investments in sustainable energy. Former Vice President Mike Pence echoed this sentiment on social media. His message is clear: Investing in sustainability is allowed, but not in our pensioners' money.

This resistance finds its way into affirmative action. In Republican strongholds like Florida, Texas and West Virginia, companies that invest less in fossil fuels like oil and coal are excluded from government contracts. This not only has consequences for American companies, but also affects Dutch pension funds managed by companies such as BlackRock, Vanguard and State Street.

Europe vs America

Unlike the US, where sustainable investment is under fire, European companies are being urged to go green more quickly. In some cases, this has led to lawsuits against companies that critics believe did not act quickly enough. This difference shows the gap between the two continents when it comes to climate policy and sustainability.

The question arises whether the American tendency to approach sustainability critically will also spread to the Netherlands. There are already critical voices from politicians and activists, but it is not yet clear whether this will result in a comparable counter-movement. The situation in the US and the response of companies and investors to these challenges is an important signal to Dutch stakeholders.

Implications for Dutch pension funds

Changes in the US may have implications for Dutch pension funds. These funds often depend on asset managers who are under pressure. America's struggle against sustainability could lead to a rethinking of investment strategies, which could affect long-term returns.

In addition, recent developments in European legislation have forced investors to consider sustainability in their investment policy. This difference between the two markets could pose challenges for Dutch pension funds as they must navigate between strict European requirements and the changing US landscape.

A glimpse into the future

Current developments in the US and possible spillover effects in the Netherlands require foresight in the financial sector. Although resistance to sustainable investment in the United States is an 'allergic reaction' from politicians, it demonstrates the importance of a clear and consistent dialogue about the importance of sustainability in the financial sector. The future of sustainable investing depends on how companies and investors meet these challenges.

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