The ESG backlash: contesting the low-carbon transition under asset manager capitalism

The increased power of asset managers has profound effects on society by reconfiguring both the ownership of strategic assets as well as the policies that govern them. This phenomenon is pronounced in the infrastructure asset class, where increasing numbers of privatised assets are acquired and traded by private equity-style funds. This asset class has extended beyond traditional infrastructures such as water or gas utilities, seeking to generate returns through the assetisation of renewable energy and other low-carbon infrastructure technologies. Yet, attempts to ‘green’ the infrastructure asset class have met resistance in the form of the ESG backlash. To scrutinize political struggles over the greening of the infrastructure asset class, this article examines the impacts of the ESG backlash on the Green Investment Group (GIG), a leading green asset manager. The findings show that although the backlash spurred a rapid shift in the GIG’s explicit climate commitments, impacts on their ability to generate financial returns from green investments and manage financial risks were limited, as the backlash only partially targeted the social relations and processes of financial value extraction that constitute the GIG’s investment model.