Has Donald Trump killed off ESG?
Environmental, Social, and Governance principles are far from dead, but their implementation and emphasis can vary based on the specific industry, company, and region. In some sectors, companies are scaling back or reassessing their ESG efforts, while others are doubling down on these initiatives, writes Zah Azeem, Partner at Wimbledon based surveyors Scrivener Tibbatts, a national party wall dispute specialist.
Examples of global companies scaling back ESG efforts
Amazon, Google, Walmart, and Meta: These tech giants have reduced their Diversity, Equity, and Inclusion (DEI) efforts, with some removing DEI-related content from their websites and reports. This trend aligns with political pressures, including executive orders ceasing federal diversity programs.
BP: This week the energy company has diluted its net-zero targets, adjusting its planned reduction in oil and gas production from 40% to 25% by 2030. This shift reflects a broader retreat from ESG standards among major corporations.
Banks: Institutions like HSBC, Morgan Stanley, Citigroup, Bank of America, Wells Fargo, and Goldman Sachs have withdrawn from the Net-Zero Banking Alliance, a coalition aimed at aligning financial activities with net-zero emissions by 2050. Legal concerns and political backlash contributed to their decisions
BlackRock: The investment firm known for pushing ESG through its asset management, faced significant political pushback, especially from Republican lawmakers in the U.S. This resulted in some changes in how the firm approached its ESG efforts, including being more cautious in public statements related to ESG integration in investment strategies.
Examples of companies expanding ESG efforts
Patagonia: Patagonia is a leader in the environmental aspect of ESG and continues to expand its commitment to sustainability. The company’s focus on reducing carbon footprints, ethical sourcing, and donations to environmental causes has only grown, and its transparency in its ESG reporting is a model for others.
Tesla: Tesla’s commitment to sustainability and innovation in renewable energy has made its ESG strategy a key part of the company’s branding, in spite of Elon Musk’s contradictory messaging. The business continues to push for environmental impact reduction, with electric vehicles, solar energy, and battery storage being at the forefront of its ESG strategy.
Microsoft and SAP: Both SAP and Microsoft have been incredibly active in ESG, especially in their commitments to becoming carbon negative by 2030. They have expanded their ESG reporting and have set ambitious goals for sustainability and equity within their workforce.
ESG in the UK Property Sector
In the UK, several property developers and investors have taken a leading role in adopting robust ESG and sustainability strategies. Notable companies include:
British Land: A prominent player in the UK property development sector, British Land has made significant strides in sustainability, aiming for a net-zero carbon portfolio by 2030. Their sustainability strategy includes efforts to enhance building efficiency and reduce energy consumption across their assets.
Land Securities: LandSec, one of the largest real estate developers in the UK, has set ambitious sustainability goals, including achieving net-zero carbon emissions by 2030. They focus on improving the environmental performance of their buildings and ensuring social responsibility in their developments.
Hammerson: This global property developer has increasingly integrated ESG into its business strategy, with a strong focus on sustainability in its retail and mixed-use developments. Hammerson has committed to reducing its environmental impact and creating positive social outcomes in the communities where it operates.
SEGRO: A leader in logistics real estate, SEGRO is committed to sustainability through carbon-neutral logistics centres, with extensive use of renewable energy and eco-friendly construction practices. Their commitment to ESG is evident in their ongoing efforts to maintain transparency in reporting and exceed regulatory requirements.
While Donald Trump’s administration is not currently in favour of positive action in response to relation to climate change and environmental regulation, it is a stretch to claim he has “killed off” ESG entirely. Although some political figures in the USA, including Trump, have strongly opposed ESG initiatives, the principles themselves continue to gain momentum in many parts of the world.
In fact, the pressure to enhance corporate responsibility in environmental, social, and governance matters has only grown, especially in Europe, where regulations like the CSRD and corporate disclosure requirements are becoming increasingly stringent. Even in the USA, major corporations continue to adopt ESG practices, recognizing their importance for long-term business sustainability and attracting investors who prioritize ethical and sustainable practices.
While certain political pushbacks and challenges to ESG frameworks exist, particularly in the USA, these principles remain deeply embedded in corporate strategies globally, particularly in industries such as real estate, technology and finance.
If you would like to discuss ESG or something related to a valuation please contact Zah via email at zah@scrivenertibbatts.co.uk or call 020 8947 7040.
