Efforts to sway public opinion on ESG aren’t working, survey suggests

A Gallup poll shows that people's familiarity with ESG and views about it might not have been affected by the culture wars.

Most Americans are just as in the dark about ESG as they were a year ago, a possible sign that the war on “wokeness” is having minimal effect on how people view investing.

That’s according to results of polls by Gallup, the most recent of which was published Monday. Among more than 1,000 U.S. adults polled in April, 37% said they were at least somewhat familiar with environmental, social and governance in investing, versus 36% who said the same in 2022.

Fifty-nine percent of people said they had no views on ESG investing, while 22% had favorable opinions, and 19% negative ones. But among those who said they were familiar with ESG, 36% viewed it positively, 35% negatively and 29% neutral, according to Gallup.

For the survey, the pollster described ESG as “factors like the record of a business on human rights, the environment, diversity or other social values” being taken “into account when making decisions about buying products and services or investing.”

Gallup made a distinction between “financial factors” and ESG, which differs from how many proponents view the subject. ESG factors are often considered to be data sources used to inform investment decision-making. When such data are financially material, a fund may not necessarily be considered an ESG strategy, even if it uses such factors along with other traditional financial data. When the factors are used more significantly, such as in funds that focus on renewable energy sources, strategies might be “sustainable” or “socially responsible.”

However, respondents were more opinionated when it comes to the use of ESG factors in retirement plan investments. When asked if fund companies should “only take into account financial factors including historical investment returns” or “take into account ESG factors in addition to financial factors,” 48% said the former, and 41% the latter, with 11% having no opinion.

The Department of Labor’s relatively new rule governing such factors in retirement plans allows fiduciaries to use ESG data when they are material to their overall analysis on risk and return — but the rule does not require plans to include or even consider those inputs.

Another finding in the Gallup survey is that political affiliation has almost no bearing on peoples’ familiarity with ESG — but it does correlate with their opinions about it.

Although most Republicans (63%), independents (58%) and Democrats (53%) had neutral stances on ESG, only 5% of Republicans viewed it favorably, versus 20% of independents and 45% of Democrats. Just 2% of Democrats said they were opposed to ESG factors, compared with 32% of Republicans and 21% of independents, according to Gallup.

“The leaders and companies embracing ESG in investing have espoused it as a way to minimize investment risk while promoting social goods. Yet critics on the political right decry it as a system designed to achieve progressive goals at the expense of shareholders, and have advanced anti-ESG legislation in many states,” the company stated in an announcement of the results. “While this political backdrop is evident in the Gallup data, it does not appear to be an overwhelming factor driving the public’s interest in or views about ESG.”