The ESG hype is over

Five charts to start your day

ESG is dead. Those three letters became everything the financial industry got wrong to be honest. It was jargon nobody understood, complexity nobody asked for, and billions wasted on products that did not really deliver.

We killed sustainable investing with ESG by making the concept unspeakable. Every article, every presentation, every pitch forced us to define each time what environmental, social and governance actually meant. The acronym became our religion, while investors stared at us blankly.

The real tragedy isn’t ESG’s demise; it’s what we ignored while obsessing over these three letters. Sustainable investing isn’t about polar bears or hugging trees, like climate sceptics would suggest. It’s about your children never owning homes. It’s about working until you die because retirement is a fantasy. It’s about accepting that climate risk is financial risk, full stop.

We killed sustainable investing because we hid behind an acronym instead of speaking clearly. Yes! We chose jargon over clarity, complexity over courage. Now sustainable investing retreats precisely when humanity needs it most, and we have nobody to blame but ourselves. We failed our clients, our children, our future and our planet. Goodbye ESG. You will not be missed.

CHART 1 • The ESG hype is over

Bloomberg’s data tells the story well. ESG mentions on S&P 500 calls have collapsed by three-quarters since 2022. Energy prices normalised. Rates stayed high. Politicians turned hostile. The buzzword died.

But sustainability didn’t die; it just dropped the costume. Now it’s “risk, regulation and returns” because that’s what actually matters. Management teams got the message: with capital expensive and approvals brutal, nobody cares about virtue signalling. Projects need cash returns, not catchphrases. Climate talk survives only when it hits the bottom line through carbon costs, methane rules, tax credits. The fluff is dead.

For investors, less noise means clearer signals. Forget pledges. Watch disclosures on carbon pricing, supply chain laws, compliance costs. Winners will be operators with costed decarbonisation plans, not dreams. Companies with grid access, not aspirations. Firms with real revenue from electrification, not press releases.

The collapse in ESG mentions isn’t the end of sustainability. It’s the end of bullshit. What survives is what always mattered: price power, capital discipline, regulatory clarity. Everything else was noise.

Source: Bloomberg

Sorry if I was a little frank this morning, but this is something that really annoys me. We had a chance to ensure the preservation and future wealth and health of our children and we squandered it. As in industry we need to take more responsibility. It's not just about sustainable investing, but it's also about creating an investment industry that is also sustainable. If we cease to exist, then we can help no one in their financial freedom and future wealth creation.

I have for more charts to share with you along the same theme of renewable energy and carbon emissions today. If you're curious, please become a pay subscriber and support me.

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