Failure as Success

January 2025, the month in which Donald Trump became US president for the second time, was a dismal month for the business of ESG (environmental, social and governance) investing. On the 17 January, BlackRock, the world’s largest asset manager, settled out of court a consumer protection lawsuit that the Tennessee Attorney General had filed against it a year earlier. Highlighting BlackRock’s involvement in voluntary ESG alliances, such as the Net Zero Asset Managers initiative (NZAM), which requires members to incorporate climate concerns into investment decisions, Tennessee argued that these commitments conflicted with BlackRock’s fiduciary duty to maximize financial returns for its clients. That settlement followed shortly after a judge in Texas ruled that American Airlines had breached federal law by factoring ESG into its own 401(k) retirement plan investments. As in the BlackRock–Tennessee case, to have allegedly prioritized ESG over the financial interests of plan participants was, the judge said, inconsistent with American Airlines’ fiduciary duty.

Partly as a result of such legal challenges, which so far have emanated exclusively from America’s red states, major asset managers have been exiting ESG alliances in droves. The first high profile departure came as early as December 2022, when Vanguard, one of BlackRock’s main competitors with nearly $10 trillion in assets under its management, withdrew from NZAM. By 2024, the trickle of departures had become a stream: JPMorgan Asset Management and State Street Global Advisors both exited Climate Action 100+, another voluntary alliance, that year, while Baillie Gifford left both Climate Action 100+ and NZAM. Up to that point, BlackRock, which in previous years was arguably the most outspoken advocate of ESG principles within the asset-management community, had held firm, but between the American Airlines decision and Trump’s return to power, a straw seemed finally to break the camel’s back. In January 2025, Blackrock too withdrew from NZAM, with reporters citing “increasing pressure from Republican politicians over its climate efforts.”

Big finance’s overt abandonment of climate concerns reflects what is perhaps the most significant shift in climate politics associated with the return of Trump and the rise of America’s new right. Notwithstanding claims to the contrary, Trump’s move back to the White House has not—yet—led to any significant change of course in the American government’s own climate policy: lamentable now, that policy was, in reality, only marginally less lamentable under Trump’s predecessor, Joe Biden. Twenty-first century American illiberalism and liberalism have both been thoroughly soaked in fossil fuels, and particularly in their US-based production.