At first glance, it looked like the CFA Institute, the Institute of Chartered Financial Analysts, had caved into the Trump administration’s war on ESG. The Institute is a premium global professional investment association founded in 1962 by Lewis F. Powell, a famous conservative Republican who later became Supreme Court Justice. It was reported this week that the CFA Institute would be dropping the term “ESG” from the Certificate in ESG Investing, its main product to guide investors in green finance, launched in 2021. The Institute said it would rename it and that, as of April 8, 2025, it would be henceforth called “Sustainable Investing Certificate.”
The mainstream media, in reporting the news, implied that this decision was taken under pressure from the Republican campaign against “woke capitalism.” As noted by the media, the “ESG” label had become “politically charged, particularly in the U.S., over the past few months since the election of Donald Trump as President” in November 2024.
Undoubtedly, Trump has carried out a war on ESG, as Impakter reported earlier this year in several articles, notably about the Texas lawsuits against asset managers. By January 2025, BlackRock was the latest large firm in America to depart ESG impact investment groups calling for lower-carbon portfolios. And this news, as I argued in that article, was yet another confirmation that Trump’s America would not address climate change, social justice, and corruption issues.
This week, Trump’s anti-climate pronouncements came fast and furious, like a tornado. The war on ESG reached a climax with the total demolition and subversion of America’s signature environmental institution, the US Environmental Protection Agency (EPA).
It happened on Wednesday, March 12, with the announcement that dozens of the nation’s most important environmental regulations would be repealed, including limits on pollution from tailpipes and smokestacks, protections for wetlands, and the legal basis that allows for the regulation of the greenhouse gases that are heating the planet.
Lee Zeldin, Trump’s appointee to lead the Environmental Protection Agency, reversed the purpose of the EPA, turning it from environmental protection to an environmental destruction agency. He called this “deregulation”.
In a two-minute-and-18-second video posted to X, Zeldin boasted about this historic change, claiming that this deregulation spree would fulfill his agency’s mission which he conveniently (and illogically) redefined for the purpose as “lowering the cost of buying a car, heating a home and running a business.”
So this is the setting in which green finance investors need to operate—or to use the CFA terminology, this is the world in which “sustainability investing” will have to take place. And make no mistake, it will happen, despite Trump’s war on ESG. It will, of course, be on pause in the US, but it will happen everywhere else, from Europe to China.
Why? Because the future can’t be held back. Because the world will march on while America stays stuck in its 19th-century fossil-fuels-based industrial past.
Why is ESG now called “sustainable investing”?
The CFA Institute knows its clients; it caters to savvy investors who refuse to stay stuck in the 20th-century fossil fuels-based economic model promoted by Trump. They know that the fossil fuels industry and its plastic and other chemical derivatives are not the places where innovation happens. That is the past, and smart investors look to the future, determined to catch in on the benefits of the next wave in technological progress.
Where is that new tech wave happening? A collapsing environment and accelerating climate change have changed the economic game: To not only survive but thrive, society needs to adapt to this new world. A whole new range of challenges are now facing society in the economic, social, and governance/management spheres — and yes, that happens to be the Trump-denigrated ESG.
In short, to solve all the problems society faces today, the economic model on which our society is based must change. The first step is to move away from the straightjacket of fossil fuels-based economics and start constructing a sustainable business model. Nothing else will work. And, because a sustainable model is so different from the “classic” industrial one, you don’t have stockholders on one side and the rest of the people outside. Everyone is a shareholder, and we are all part of one world facing common problems.
Therefore, there is a need for a deep change in mindset – new ideas, new ways to look at things, and an open mind to welcome inputs from diverse sources because that’s where innovation and breakthroughs happen.
Innovation doesn’t happen in a stultified industrial environment, the kind Trump and his libertarian supporters, like Elon Musk, J.D Vance and Peter Thiel, are calling for. Innovation only happens in a sustainable business model. And, that model also happens to be the one most strongly supported everywhere by consumers worried about climate change and industrial pollution. Unfortunately for America, with Trump at its helm, it has become the last place on earth where you still find climate deniers driving politics.
How global green finance is holding up: The CFA Institute’s solution
The CFA Institute, as a global institution, must serve investors everywhere, not just in America. So, if you take away the term ESG and replace it with “sustainability,” what have you got left? Does that change anything?
The answer is no. The term “sustainability investing” covers it all, same as ESG.
Consider the analysis required to determine whether an investment product is intended to support a sustainable investment: To be credible, such an analysis has to necessarily cover the whole range of challenges, from the environmental ones to the social and management or governance ones. In short: back to the ESG analytical framework.
A look at the CFA Institute’s FAQs section is revealing. To the question “What are the Global ESG Disclosure Standards for Investment Products?” the CFA Institute’s answer is unerringly precise and comprehensive:
“The Global ESG Disclosure Standards for Investment Products are ethical standards for the fair representation and full disclosure of an investment product’s ESG approaches. What is an “ESG approach”? The Global ESG Disclosure Standards for Investment Products use the term “ESG approach” to refer to any one of a variety of methods for considering ESG issues in an investment product’s objectives, investment process, or stewardship activities. This term includes but is not limited to approaches that are often referred to as ESG integration, exclusion, screening, best-in-class, thematic, sustainability themed investing, impact investing, and stewardship.” (bolding added)
In short, changing the name of the certificate will not change anything to the substance of the work done by the CFA Institute. It is primarily an exercise in verifying the soundness with which an investment product covers ESG issues, taking into account the whole investment process, from establishing investment objectives to the actual process of investing and the monitoring of investment results to ensure quality financial management—or, to use the CFA Institute’s own terminology, the “stewardship of investment activities.”
ESG is just shorthand to refer to the whole range of sustainability considerations. As long as an investment product correctly covers the whole range of sustainability issues, then the CFA Standards come into play and guide green finance investors. As the CFA Institute’s FAQs put it:
“An investment product does not need to be named, labeled or classified as an “ESG” investment product for the [CFA] Standards to apply. For example, many traditional investment products systematically consider financially material ESG information in investment decisions. The Standards have disclosure requirements pertaining to this ESG approach.” (bolding added)
Conversely, for those investment products that “do not use any ESG approaches,” then the “Standards are not applicable to such investment products.” This is clear: The CFA continues to be fully committed to sustainable finance, as is obvious in this interview podcast with Dr. Ma Jun, President of the Institute of Finance and Sustainability (IFS) located in Beijing and founder of CASI (Climate Action and Sustainability Initiative) carried out just 3 weeks ago, on 21 February by Paul Moody, Managing Director at CFA Institute:
There you have it: Trump and the Republicans can ditch the term ESG if they want to, but reality will catch up with them as their policies sink the American economy in a polluted industrial past.
In the meantime, expect the rest of the world to surge forward on its ESG path.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com In the photo: Featured image on CFA Institute’s careers page, where staff positions can be viewed and applied for.
