Several high-profile corporations are retreating from their environmental, social and governance (ESG) policies, sparking concern across the FinTech sector, where transparency and sustainable investment practices are becoming increasingly critical.
According to Dugald Higgins, Head of Responsible Investment & Real Assets at Zenith Investment Partners, this strategic back-pedalling by major firms — including Microsoft, Unilever, BP and Walmart — has involved pulling back from voluntary ESG initiatives such as the Net Zero Asset Managers initiative and the Net Zero Banking Alliance.
While the corporate ESG retreat is largely attributed to regulatory uncertainty, Higgins warns it may damage long-term financial risk management and reputational standing, according to Financial Newswire.
Zenith, an investment research and consulting firm, believes investors still view ESG metrics as essential components of decision-making.
Despite the wavering corporate commitment, demand for reliable ESG and sustainability data remains strong among institutional investors and asset managers.
This ESG pullback is happening amid significant global regulatory flux. In the United States, the Securities and Exchange Commission (SEC) recently abandoned its push to enforce mandatory climate disclosure rules — a move echoing policy shifts from the Trump administration.
Meanwhile, the European Union has also watered down its ESG reporting requirements through the Omnibus package.
Australia is facing a similar climate of uncertainty, with upcoming elections casting doubt on the permanence of new ESG measures implemented by the Australian Securities and Investments Commission (ASIC).
Companies now find themselves navigating a “regulatory rollercoaster,” says Higgins. This turbulence has led many firms to reassess their level of ESG engagement, particularly after high-profile ‘greenwashing’ scandals involving AMP, Crown, Rio Tinto, Wisetech, and Mineral Resources. In some cases, this reassessment has resulted in companies withdrawing entirely from sustainability targets, a phenomenon now dubbed “greenhushing.”
Despite the current retreat, Higgins is confident that ESG reporting will not vanish but will instead evolve.
He predicts a shift toward more “strategic and selective” sustainability commitments. “The reality is that ESG considerations are now deeply embedded in the investment process,” he said. “Ignoring these factors doesn’t make them go away. Whether or not the information is there doesn’t remove the risks.”
Looking ahead, Higgins emphasised that firms who integrate ESG into their core strategies — rather than treating it as a superficial marketing tactic — will be better positioned to weather the political and regulatory storms. “While regulatory uncertainty may slow ESG progress, companies that integrate decision making around ESG and sustainability into their core strategy will future proof their business and investor appeal.”
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