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Corporate America Is Starting To Shy Away From Woke Business As Backlash Mounts

U.S. companies will hire more employees in roles related to environmental, social, and corporate governance (ESG) issues in an effort to boost profitability and deal with investor backlash, according to the Wall Street Journal. This is reversing the trend of the past few years.

U.S. companies shed 3,071 employees in ESG-related positions in December, but added only 2,897, continuing the trend of net declines in ESG positions seen in half of last year's months. according to In WSJ. This shift is a response to investors pulling money out of companies with deep commitments to ESG practices and putting money into companies with higher returns. (Related article: Wealthy investors are snapping up cheap properties as the commercial real estate sector struggles)

“In 2023, we've seen a real lull in the debate around ESG, and in some regions we've seen some pretty significant attacks on ESG content,” said Managing Director at executive search firm Clips Leadership Advisors. , Joe Dubin told WSJ. “That definitely permeates into the hiring requirements that we have.”

According to WSJ, companies will hire 40,884 ESG-related employees in 2023 and 39,452 will retire, compared to 2022, when more than 66,000 people will be hired and about 55,000 will retire. are very different. Hiring numbers peaked in 2021 at more than 68,000 people, with 49,383 people leaving the company.

According to WSJ, the companies that cut the most ESG employees in 2023 include Facebook's parent company Meta, Amazon, and Google. More broadly, the technology, financial services and consulting sectors had the highest outflows.

ESG funds lost about $2.7 billion in the third quarter of 2023, with more ESG funds closing than opening. The outflow of funds from ESG funds in the third quarter was the fourth consecutive quarter of outflow.

Top asset managers are facing legal pressure from Congressional oversight, with Ohio Republican Rep. Jim Jordan filing a lawsuit against Vanguard, Arjuna Capital, BlackRock and State Street Global Advisors in December. , sent a subpoena seeking documents as part of an antitrust investigation into ESG collusion. The investigation began in December 2022, when Congressional officials alleged that asset managers were forming a “cartel” to reduce companies' greenhouse gas emissions.

Republican Gov. Ron DeSantis of Florida announced in May 2023 that state and local governments should use ESG guidelines when issuing bonds in an effort to prevent financial institutions from discriminating against customers based on political, religious, or social ideology. Signed a bill banning the consideration of factors. Mr. DeSantis also led an 18-state coalition against ESG in March 2023, calling on states to follow Florida's example and ban certain practices.

“We need to understand the language we use to stay compliant, but we also need to continue to do business with our biggest customers who are asking for sustainability, carbon data, and ESG data,” says the director. says Mike Wallace. The head of decarbonization at carbon accounting firm Persephone told the Journal.

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