Despite several reports speculating that EU-based businesses will rollback on ESG investment, appetite for long-term climate change initiatives remain strong.

Often, what starts over there eventually finds its way over here. And so, it seems, is the case with ESG investing. With many US investment fund managers having begun to deprioritise funds labelled with those three letters over the past year, now it seems attitudes amongst their counterparts in Europe are following suit.

A survey — albeit small sample size — of European fund managers this week found the majority believed the cooling of enthusiasm for ESG funds, that had taken hold in the US, would soon be reflected here. Particularly where measures to counter climate change were central.

The pushback was partly tied to shifts in government policy, the piece said. The European Union has been seen to soften its stance on climate policy of late, particularly on its landmark ‘green deal’ package of broad measures ahead of last year’s elections. Whether policy shift will amount to softening or adaptation to a changed global environment remains to be seen.

The Guardian reported this week that support for ESG proposals from investors had hit a record low. The article highlighted that while an ESG retreat may be the headline, the context is deprioritisation of corporate climate action, with commentators believing that shareholder proposals were flimsy in supporting broader stakeholder value.

Meanwhile, asset manager BlackRock has suspended meetings with companies to give it time to reassess what Securities and Exchange Commission rule changes really mean for ESG disclosure practices.

ESG investment may have had the wind taken out of its sails, but look beyond that to what large companies are doing with long-term initiatives to address climate change, and the picture is somewhat different. Many continue to reaffirm commitments to transformation, to emissions reporting and to net zero programmes.

Ikea’s parent company triggered several headlines this week when it unveiled a stronger net zero transition plan. It said: “Based on deep dive analysis of our emission categories, and our climate risks and opportunities. We have a solid plan with clear actions, yet climate change is highly complex, and we don’t have all the answers. At the same time, we are transparent about our challenges, dependencies and innovation gaps and take a leading role in conversations and collaborations that will support us in delivering to our goals.”

It points to a situation where investment practices may be shaken up, and better regulated. But, companies that have already invested huge amounts in a cleaner business transition which is driving value may stick to their guns. Policy may set the tone and shape the task, but the value potential and risk mitigation may be the corporate priority.