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Corporate America Scaling Back on ESG Hiring Amid Investor Pushback

Facing investor dissatisfaction, U.S. firms reduce ESG roles, emphasizing profitability over 'woke' corporate governance practices.

In a significant shift that signals the changing tide in corporate America, companies across the United States are scaling back their employment in the realm of Environmental, Social, and Governance (ESG) roles. This move, a stark reversal from the hiring frenzy of previous years, underscores a growing realization among business leaders: profitability and investor satisfaction cannot be sacrificed at the altar of ESG ideology.

The Wall Street Journal reports that December saw a net reduction in ESG positions, a trend consistent with the latter half of the year. This cooling off from ESG fervor is a direct response to investor backlash. Investors, weary of the low returns from heavily ESG-committed companies, are redirecting their funds toward ventures promising higher yields. The market is speaking, and it’s clear that the ESG bubble is beginning to burst.

In 2023, the gap between hires and departures in ESG roles narrowed significantly, with the technology, financial services, and consulting sectors leading the exodus. Even giants like Amazon, Google, and Meta, have not been immune to this shift. This retreat from ESG hiring marks a sobering reality check for companies that, until now, have been riding the wave of ESG enthusiasm, often at the expense of their core business objectives.

This recalibration comes at a time when ESG funds are experiencing a pronounced withdrawal of investments, with consecutive quarters of net outflows indicating a broader disillusionment with the ESG ethos. The once-celebrated ESG investment funds are now closing their doors more frequently than opening new ones, a testament to the shifting investor sentiment against the ESG agenda that, for too long, prioritized political correctness over profitability.

Legal pressures are mounting as well, with congressional oversight led by figures like Rep. Jim Jordan, signaling a crackdown on what is perceived as ESG collusion among top asset managers. This scrutiny, alongside legislative actions by leaders such as Governor Ron DeSantis, who has taken a firm stand against ESG considerations in state and local government dealings, exemplifies a growing pushback against the ESG movement’s overreach.

As companies pivot back towards their fundamental business imperatives, it’s becoming increasingly clear that the era of unchecked ESG dominance may be drawing to a close. In its place, a more balanced approach is emerging—one that respects environmental and social considerations without compromising on the core principles of profitability and shareholder value.

As this trend continues, it’s imperative for companies to navigate the changing landscape with caution, ensuring compliance and environmental responsibility without losing sight of their primary mission. The decline in ESG hiring is a bellwether for the future of corporate America, signaling a return to pragmatism in the face of ideological pressures.

Robert Chernin

Robert Chernin

Robert B. Chernin has brought his years of political consulting and commentary back to radio. As a longtime entrepreneur, business leader, fundraiser and political confidant, Robert has a unique perspective with insights not heard anyway else. Robert has consulted on federal and statewide campaigns at the gubernatorial, congressional, senatorial, and presidential level. He served in leadership roles in the presidential campaigns of President George W. Bush as well as McCain for President. He led Florida’s Victory 2004’s national Jewish outreach operations as Executive Director. In addition, he served on the President’s Committee of the Republican Jewish Coalition. Robert co-founded and served as president of the Electoral Science Institute, a non-profit organization that utilizes behavioral science to increase voter participation and awareness. Robert can be heard on multiple radio stations and viewed on the “Of the People” podcast where you get your podcasts.