The ESG Mayhem: Why the World’s Most Promising Investment Idea Is Now Caught in a Global Tug-of-War

There was a moment—only a few years back—when ESG (Environmental, Social, and Governance) investing was the future. Every corporation desired a slice of the action. Trillions of dollars went into ESG funds, boards frantically hired Chief Sustainability Officers, and "green" went from being a niche to being mainstream.

Flash forward to 2025. That impetus has slammed into a wall. Actually, scratch that—it's been body-checked into political anarchy.

Thanks to a keen change in American leadership and increasingly global contradictions, ESG has become a battlefield. What once was a linear tale of sustainable advancement is now complicated, polarising, and downright messy. And yet, step back far enough, and this could be ESG's moment of growth—its trial by fire.

Let's go through what's actually going on behind the headlines, and what it means to business leaders seeking to make the brightest, most forward-thinking decisions in the midst of the storm.

ESG strategy, corporate sustainability, and climate risk, shaping the future of responsible investing.

ESG Was a Juggernaut—Now It's Being Tested

Donald Trump's re-election has struck ESG like a wrecking ball. His team does not view ESG as a new path forward; they view it as a political tool. ESG is "woke capitalism" in this context—and that terminology has driven many of America's corporate behemoths into hiding. They're either distancing themselves from previous ESG pledges or eerily remaining mum.

And it's succeeding. Shareholder backing for ESG resolutions? Collapsing.

In 2024, only 1.4% of shareholder proposals related to ESG succeeded—compared with 21% in 2021. That's not a decline. That's an almost-collapse of official investor support. The main reason? Asset management goliaths such as BlackRock, Vanguard, State Street, and Fidelity—who had been leading the charge on ESG—endorsed just 7% of such proposals.

In the meantime, the rest of the world hasn't hit pause. Europe? Still gung-ho, doubling down on regulation. Asia? Gaining quietly, particularly in India, Singapore, and Japan. Which is to say that for any business with a global footprint, ESG has evolved into a tightrope act between celebration and suspicion.

Two Worlds, One ESG Headache

Let's say what it is: the world now lives two ESG realities.

In the U.S.: ESG Under Fire

Under the Trump administration, ESG isn’t just facing indifference—it’s actively being rolled back.

The SEC has halted climate risk disclosure rules.

Shareholder powers are shrinking, making it easier for companies to shut ESG proposals down before they even reach a vote.

Six of America’s largest banks—including Citigroup and Goldman Sachs—exited the UN Net-Zero Banking Alliance. Translation: we’re out of the climate commitment game.

Even DEI (Diversity, Equity, Inclusion) initiatives are coming under attack. From Alphabet to Meta, firms are retreating, either due to internal politics or external threats.

Then there was ExxonMobil's bombshell: a lawsuit to prevent shareholders from even submitting climate-related proposals. Sure, the lawsuit was later dropped. But the message was clear: ESG activism is no longer simply being ignored—it's being challenged in the courts of law.

In Europe: ESG Is Law

Europe is putting ESG into law—and there is no going back. The Corporate Sustainability Reporting Directive (CSRD) requires comprehensive disclosures on everything from carbon footprints to human rights conduct. This covers 50,000+ firms, including many non-EU firms.

And regulators aren't kidding. These sustainability reports are being treated like financial audits—with accountability in the mix.

Yes, there is controversy. Yes, small businesses are being given a temporary reprieve until 2028. But overall, Europe is emphatic: ESG is about long-term value, and you don't get to pick and choose what's convenient.

The outcome? European asset managers continue to support 81% of ESG proposals. The public is behind it. The regulators are on side. And the money's catching up.

In Asia: ESG Momentum Builds—Quietly, but Firmly

Asia might not scream ESG from the rooftops, but it's making bold moves—especially in India.

India’s BRSR mandate requires the top 1,000 listed companies to report on 98 ESG indicators, from carbon emissions to gender ratios.

From FY 2025–26, the top 500 of those companies will also need external verification of these reports.

SEBI (India's financial regulator) has even started regulating providers of ESG ratings, bringing transparency to a market that's historically been riddled with greenwashing.

Elsewhere, Singapore, Hong Kong, Japan, and Taiwan are coming into line with global standards such as the ISSB and TCFD, ESG disclosure is becoming an accepted financial norm.

And even with global retreats, the markets for sustainable finance in Asia are expanding. In 2023, the Asia-Pacific region saw a 40% increase in sustainable bond issuance, accounting for close to one-third of the worldwide volume. That's not optics—those are investors voting with their dollars.

The Communication Trap: Greenhushing Is the New Greenwashing

And that's where things get most bizarre.

With all the political fire in the U.S., businesses are responding by not responding. They're keeping quiet—what analysts today refer to as greenhushing. As Bloomberg reports, citations of "climate change" in S&P 500 earnings calls have fallen 76% in the past three years.

Why? Because ESG speak now inspires culture war argumentation. Rather than being praised for visionary strategy, businesses are labeled as "woke capitalism." So they remain silent.

But here's the catch: silence wounds accountability. If companies remain silent on their ESG progress, stakeholders won't be able to hold them accountable. Climate laggards fall below the radar. Momentum creeps to a halt. Trust is eroded.

It's a lose-lose.

A Balancing Act: One Company, Several Worlds

Let's assume you're a multinational company. What do you do?

• In Germany, the regulators require your carbon footprint.

• In Texas, you'll be blacklisted if you restrict oil & gas contracts.

• In India, your ESG report had better be audited and SEBI-approved.

• Same company, different rules, expectations, and political risks.

Here's what astute companies are doing:

They message, not the mission. Call "climate risk mitigation" in the U.S. and "net-zero roadmap" in the EU. Same plan, different framing.

They make the business case for ESG. Less "save the planet," more "reduce costs with energy efficiency." It is not about sugarcoating—it is about reading the room.

They educate boards and executives on local ESG dynamics. A few companies are even setting up special ESG committees or appointing directors with sustainability skills.

What Can Corporate Leaders Actually Do?

You don't have to take sides. You just need a strategy. An actual one.

1. Know Your Stakeholders

In one part of the world, ESG may be a baseline. In another, it could be a red flag. Know who you're speaking with and what matters to them. If regulators, investors, or consumers demand ESG performance, make it a central strategy—not an afterthought.

2. Don't Fall into the One-Size-Fits-All Trap

Frankfurt ≠ Florida. What is successful in one marketplace could be catastrophic in another. Tailor your ESG efforts by geography. Adapt the tone. Reconsider rollout timing. Be nimble, not reactive.

3. Focus on What's Material

Don't pursue ESG trends for window dressing. Focus on the ESG risks and opportunities most relevant to your business model—climate, data security, labor practices, or governance transparency, for example.

4. Keep Talking (Just Smarter)

Silence is not strategy. You do not need to wave an ESG flag, but concealing progress is a misstep. If you're making strides, share them—in tone that resonates with your audience. Consider risk management, long-term value, operational resilience.

5. Train, Equip, and Adapt

Bring your board up to speed. Apply scenario planning. Be prepared for policy changes. And perhaps most crucially—don't panic. This is a tempest you can ride out if you're not flying blind.

Case Studies: ESG Survival Playbook

JPMorgan Chase & Co.

Betwixt ESG ambitions and American political pressure, they didn't abandon ship. They merely changed their rhetoric—still working towards sustainable finance objectives, but prioritising "energy transition" ahead of climate activism. Subtle, but deliberate.

Unilever & Ben & Jerry's

Confronted with U.S. anti-ESG backlash, Unilever made it clear that their unpopular subsidiary didn't represent the entire company—without sacrificing space for social mission. A tightrope balancing act that paid off. 

Follow This (Climate Activist Group)

After years of driving shareholder proposals at oil majors, their support evaporated. They suspended operations in 2025. Why? Because even socially progressive investors weren't voting their way anymore. A sobering reminder: ESG pressure tactics must constantly adapt.

Bonus Insight: The New Boardroom Mandate — ESG as a Core Competency

As ESG matures, so does the skillset required to govern it. More companies are now viewing ESG literacy as a board-level priority, not just a CSR or compliance issue.

According to a recent study, the number of board directors with formal ESG credentials has doubled among the top 100 U.S. companies since 2018.

Progressive firms are forming dedicated ESG committees, or baking ESG performance into executive KPIs.

In India and parts of Asia, regulators now expect directors to be equipped to interpret ESG disclosures, engage with ESG risks, and oversee sustainability strategy at the board level.

Why this matters: The conversation around ESG isn’t just tactical anymore. It’s strategic, and it's boardroom material. That means ESG-readiness isn’t optional—it’s governance 2.0. For business leaders and independent directors, this is your signal to skill up.

Conclusion: ESG Isn't Dead—It's Growing Up

So here's the truth: ESG isn't dead. It's simply no longer the easy victory it once was.

What we’re seeing now is a messy, global stress test. The movement is being pulled, pushed, politicised, and professionalised. And companies are caught in the middle.

The ones who will win? Not the loudest. Not the most idealistic. But the most strategic, adaptable, and stakeholder-focused.

They’ll know when to speak boldly—and when to say the same thing, just differently.

They’ll know that ESG isn’t about pleasing everyone. It’s about future-proofing your business.

Because the climate crisis isn't vanishing. Labor standards continue to count. Governance breakdowns continue to wreck value. These aren't political tricks—these are operational facts.

And amidst the ESG chaos, the greatest leaders won't merely make it through.

They'll lead.

Our Directors’ Institute- World Council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out efficiently, helping you make a significant contribution to the board and raise corporate governance standards within the organization.