Displaying items by tag: esg

Investors have continued to pull billions from ESG (environmental, social, and governance) funds in early 2025, amid growing political backlash and shifting federal policies under President Trump’s administration. 

In the first quarter alone, ESG funds saw $6.1 billion in outflows, marking the tenth straight quarter of declines, according to Morningstar. Much of this retreat has been attributed to the administration’s aggressive rollback of climate and DEI (diversity, equity, and inclusion) initiatives, including pulling out of the Paris Agreement and cutting subsidies for green energy. 

Despite political resistance, ESG investing remains popular among younger investors and retains institutional support, particularly in pro-ESG states like California. Analysts argue ESG strategies still offer long-term value, positioning investors in companies better equipped to handle emerging environmental and social risks. 

Finsum: Advocates maintain it's a smart approach to building resilience and returns in an evolving global economy, and necessary to combat emerging environmental issues. 

Climate technologies are advancing from early innovation to the critical scaling phase, where private equity firms are stepping in to bridge funding gaps. Private equity investors play a vital role by providing capital and operational expertise to transform climate innovations into scalable, market-leading businesses. 

Firms like General Atlantic and Ardian are integrating sustainability into their investment strategies, using data-driven insights to enhance both commercial success and decarbonization efforts. 

Institutional investors increasingly demand quantifiable impact, prompting firms to assess companies not just on financial returns but also on emissions reduction potential. Key investment opportunities lie in grid infrastructure, e-mobility software, and carbon transparency solutions, as demand for sustainable energy and efficiency grows. 

FINSUM: This hands-on, impact-driven approach is reshaping climate finance, positioning private equity as a crucial driver of the energy transition.

Donald Trump’s stance on renewable energy has created uncertainty, but investors are still finding opportunities in the sector. Federal permitting delays and funding pauses have caused disruptions, though legal challenges may curb their effects. 

Meanwhile, energy firms such as TotalEnergies see long-term potential in the U.S. market and continue to invest in clean power. Enphase Energy has defied expectations with solid earnings and an expanded domestic manufacturing footprint. 

While offshore wind faces setbacks, onshore projects are set to grow significantly this year. Companies like First Solar and Vestas Wind Systems, despite recent stock declines, could benefit from the ongoing transition to renewables.

Finsum: Renewables aren’t dead, but there is certainly going to be more attention on which firms can withstand the tightening that could come with the new administration. 

President-elect Trump has announced his intention to block new wind energy projects during his upcoming term, arguing that the industry relies heavily on subsidies to function. Known for his support of fossil fuels, Trump has appointed fracking executive Chris Wright as his Energy Secretary and emphasized policies favoring traditional energy sources. 

His opposition to wind power, which he has called unsightly and harmful to marine life, extends to plans for an immediate executive order to halt offshore wind production. Although renewable energy advocates predict that existing projects will continue despite the political shift, companies like RWE acknowledge potential delays in offshore wind timelines. 

Critics, including Sen. Ron Wyden, have warned that abandoning wind energy will raise electricity costs for families and reduce domestic energy output. Clean energy leaders stress the importance of a diversified energy strategy to meet the nation’s rising energy demands.

Finsum: These policy shifts are clearly going to affect market fundmentals over the next term, will there still be enough industry support to prop up ESG? To be determined.

Strive Asset Management has launched direct indexing services on Fidelity and Schwab platforms, reaching a broad retail audience. These services emphasize daily tax-loss harvesting and pro-shareholder governance, avoiding ESG or DEI constraints. 

Powered by Vestmark’s VAST technology, the initiative aligns with Strive’s anti-ESG philosophy, aiming to deliver superior financial outcomes for clients. CEO Matt Cole highlighted the unique value of Strive’s approach, citing frequent drawdowns in large-cap equities that offer tax-harvesting opportunities. 

Founded in 2022 by Vivek Ramaswamy, now a key figure in President-elect Trump’s administration, Strive manages $1.7 billion in assets. Its ETFs focus purely on financial returns, contrasting with ESG-oriented funds by voting against ESG shareholder proposals.

Finsum: ESG and DEI oriented funds will have an uphill battle against the trump administration.