Former DWS group sustainability officer Desiree Fixler said it is time to “retire the term ESG” in response to findings financial market participants are becoming wary of using the term while still applying its principles in their business.
The survey of 300 Bloomberg terminal users indicated firms are under increased pressure to stop using the environmental, social and governance (ESG) acronym in conversations with clients following a slew of negative headlines in the US.
However, ESG best practice remains an important consideration in the investments and internal operations of banks and institutional investors.
Responding, Fixler (pictured), who is speaking at ETF Stream’s ETF Buyer London 2023 event on 7 November, said: “It is about time we retire the term ‘ESG’ and use clear, specific language in terms of risk management and value creation.”
Previously, she argued: “ESG has been politicised, exploited and phenomenally conflated. The hype and ambiguity of the term conveniently played into and helped fuel a culture war.
“How substantive is the anti-ESG backlash? Is it time to retire the term ‘ESG’? What is up with all the greenhushing?”
Fixler’s comments follow Florida Governor and Republican presidential hopeful Ron DeSantis signing an anti-ESG bill to address the “woke” bias in the asset management industry.
Last year, 16 states implemented a Boycott Act against fund issuers excluding certain business activities from their products on ESG grounds.
Among these, the Texas pension fund listed 348 investment funds and 10 firms it would exclude because they either “boycott energy companies”, are part of climate investment initiatives or sport above-average MSCI ESG ratings.
Fixler was front-and-centre of the ESG debate after being dismissed by DWS in April 2021 for alleging the German asset manager had misled investors by stating $900bn of invested assets were ESG-aligned.
Oxford Saïd Business School Professor Robert Eccles described Fixler as a “brave whistleblower who called out egregious ESG greenwashing by DWS”.
In June 2022, 50 officers from the Frankfurt public prosecutor, BaFin and the Federal Criminal Police Office (BKA) entered the firm’s offices as part of an investigation into potential prospectus fraud on its ESG products.
Following a number of senior personnel changes, including the departure of former group CEO Asoka Woehrmann, incoming CEO Stefan Hoops responded to the raid by authorities and its aftermath as DWS being made a “guinea pig in the public eye for how other managers should set up their ESG”.