Some commentators agree. Dr Roger Barker, director of policy and corporate governance at the Institute of Directors, says investors need to embrace ESG investing to restore capitalism’s reputation.
“These sorts of initiatives will be good for businesses and their long-term performance,” he says.
“The younger generations also have different expectations of companies. These are the up-and-coming employees and consumers as well. They expect different things from businesses than what was expected 20 years ago. But this argument isn’t over yet. We’re still in a transition process.”
Barker admits investors are at risk of irritating the public if they make empty statements on how to improve the environment.
“There is a risk that these campaigns lack credibility,” he says. “They’ll come out with purpose statements and people see through them. People just think these are empty words. I do understand that criticism, and if companies aren’t careful they can be seen as being guilty of hypocrisy as well. But you do have to start somewhere. It’s just important that the words are backed up with actions.”
For these Republicans, there is also the worry over how Wall Street’s choices could impact America’s economy. According to Strain, some are hitting back against bankers who encourage business owners to move their manufacturing operations overseas, reducing job prospects and development opportunities in the US.
“If you’re a manufacturer in Ohio or Pennsylvania and you want to move your factory to China or Vietnam, then you’ll go to Wall Street to finance it.
“There’s a feeling that Wall Street is complicit in a type of de-industrialisation that some of the conservative populace really bemoan.
“Another concern is the social value of what’s happening on Wall Street. They wonder if people could be building things and doing other work that is more in the national interest.”
Even if the two sides are no longer in tandem as they once were, Wall Street bankers are still funnelling millions into the Republican party coffers. Strain argues that the vast majority of Republican party politicians see eye-to-eye with people on Wall Street.
“I’m not sure if this [the dampening of relations] characterises the mainstream of the Republican party, but it’s definitely an element of the party and the political right,” he says.
“It is an extension of the changes of the political right that were ushered in with President Trump – the sort of populist nationalism that we now see.”
As America moves on from Donald Trump, it remains to be seen whether his disciples in the party he led will become more influential, or if Wall Street can continue to count on the Republican party for support in their move towards ESG.
