The growing disenchantment with ESG in the United States has been well documented and, if we are being honest with ourselves, should not really come as much of a surprise. All movements and trends experience a natural ebb and flow, shifting between popular and unfashionable, until they find their equilibrium.
The rise of so-called ‘green hushing’, therefore, does make sense – with asset managers taking the temperature of the room and opting not to banner up their respective ESG offerings where they are not wanted or welcome.
Choosing to invest based on a personal or religious code is nothing new. Methodists and Quakers divested from companies involved in the slave trade, also swerving weapons manufacturers. Shariah-compliant funds exclude all haram industries and do not permit investment in firms involved with goods such as alcohol, gambling and tobacco, to name a few. More broadly, the 1960s witnessed a more mainstream boycott of companies involved in the war in Vietnam.
Greater awareness of the damage some companies and practices are doing to the long-term health of people and the planet has long struck a chord with investors, many of whom subsequently chose to avoid ‘sin stocks’.
From a marketing standpoint, coupling financial returns with doing good and saving the planet was a powerful message. A 2004 report from The Global Compact is a beautiful example of this.
It was titled: ‘Who Cares Wins’. 
The report’s less poetic and emotive strapline reads: ‘Recommendations by the financial industry to better integrate environmental, social and governance issues in analysis, asset management and securities brokerage.’
The United Nations and Swiss Federal Department of Foreign Affairs co-authored the report, with the support and assistance of some of the biggest financial names in the world; including Deutsche Bank, Goldman Sachs, HSBC and Morgan Stanley.
It was a significant shot in the arm for responsible investing.
The decade following the global financial crisis proved something of a golden period for ESG. Governments and organisations rallied to the call that the financial services sector ought to be one of the key players in the fight against climate change. The rise of social media also helped spread the word, raising awareness that the voices of savers and investors can influence mega corporations.
But not every investor, big or small, wants to greenify their retirement or savings pot. Especially not when they perceive the green agenda to be putting their money at risk or stemming from a political ideology to which they do not ascribe.
This is the situation in which the US, in particular, finds itself. And companies that have built in-house ESG teams, developed tailored strategies and become signatories of various bodies, including the UN PRI and UK Stewardship Code, are caught in the crossfire.
Hence the emergence of green hushing.
The popularity pendulum has swung firmly into negative territory in large parts of the US. Whether it has further to travel before moderating is anyone’s guess.
Firms that choose to follow the prevailing view and jettison their green credentials are jeopardising their future credibility. Especially if they have operations in parts of the world that are not experiencing the same crisis of confidence in ESG.
Ultimately, how firms chose to navigate this dilemma will be determined by their owners, board members and/or shareholders, which risks putting marketing teams in a very difficult position.
Messaging that lacks authenticity is doomed to fail. But it can be reactive and targeted without losing integrity. To be blunt – you cannot sell somebody something they do not want to buy. And the purpose of an asset manager is to help clients grow their wealth in a way with which they are comfortable – and, let’s not forget, also be profitable and generate returns for owners and shareholders.
This is where asset management could take a leaf out of the car manufacturer manual. In an ideal world, everyone would drive full electric. But that’s not a likely scenario, at least for the next 10 years, given personal preferences, cost and a lack of capacity.
A hybrid offering that caters to the motoring traditionalists and the futurists, while simultaneously carving out a middle ground to gradually move people towards greener alternatives, is arguably the most practical and feasible solution.