ESG: Why Europe’s energy conversation is less confrontational than that of the US
Anti-ESG boycotts are unlikely to cross the Atlantic.
Two months ahead of the US midterm elections, US red-state governors are riding a wave of legal attacks at pro-ESG banks and asset managers. The governors state that fund managers have a fiduciary duty to maximize profit for their investors, and that socially responsible investment (SRI) policies limiting exposure to fossil fuels betray this commitment.
Will we see a similar trend in Europe? Unlikely. Europe now faces transformational demand for alternatives to Russian gas, which has changed the ESG discourse firmly to favour co-existence over exclusion.
In the US, the states of Texas and West Virginia are boycotting several European banks – including BNP Paribas, Credit Suisse and Danske Bank – based on their ESG policies towards energy investments. Similar moves in Idaho, Louisiana, Kansas and Wyoming mean that the list could get longer as climate change becomes a more partisan issue in the country.
Unlike in the US, Europe’s oil and gas producers have a leading role in the conversation around transition
It is not impossible to imagine a similar situation in Europe.