The ESG (environmental, social and governance) landscape has evolved significantly in recent years, with Donald Trump’s re-election in November 2024 compounding the situation. Now, the anti-ESG movement dominates discussions of corporate sustainability in the US, and it is firmly against investing in renewable energy and other forms of cleantech. This trend has started spreading to other parts of the world, including Europe and Latin America.
China, however, views its cleantech and renewables investments as rational decisions to future-proof its economy. As such, GlobalData believes Chinese investment in cleantech is safe from political manoeuverings. This means China’s innovation in renewables and other cleantech will continue uninhibited, and the country will cement its already staggering dominance in the sector. Once US companies eventually realise the importance of sustainability and clean energy once more, they will be forced to rely on Chinese companies — and by extension, the Chinese state.
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The anti-ESG movement is trying to halt the march of responsible business practices
The anti-ESG movement refers to a coalition of actors who, for various reasons, oppose ESG investment, regulations and company policies. The US is the epicentre of this movement, with some federal politicians, state lawmakers, fossil fuel industry lobbyists, business groups and segments of the public all trying to slow or reverse the adoption of ESG policies. These anti-ESG efforts focus on eradicating climate action and diversity, equity and inclusion (DEI) practices. Since President Trump’s re-election in November 2024, the efforts of the anti-ESG movement in the US have ratcheted up, and all companies lie within the movement’s scope.
Trump has unravelled much of the previous administration’s climate action policies, passed executive orders banning ESG investing and taken aim at DEI policies.
One major consequence of the growing anti-ESG movement in the US has been a drop in investment in cleantech and renewable energy. This is intentional from the perspective of anti-ESG actors, as the Trump administration has cut a multitude of tax credits designed to encourage exactly this sort of investment. As a result, the US is going to fall further behind its main competitor in this space: China.
China views cleantech as a rational investment to future-proof its economy
China has not had to deal with the mounting anti-ESG sentiment that we have seen elsewhere. While restrictions on freedom of expression undoubtedly have a role to play here, the lack of anti-ESG sentiment is partly due to a lack of moralising around sustainability. Instead of positioning cleantech investment as a moral stance, China focuses on business outcomes and future-proofing its economy. When the de-politicised facts of the business case for ESG are laid out, there is essentially no counterargument to be made.
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By GlobalDataThis means China’s innovation in sustainable technology has been able to flourish, while the US has languished behind. According to GlobalData patents analysis, in 2016, the number of environmentally linked patents filed by the US and China was relatively similar. While the US filed 23,358, China filed 28,326 — only around 20% more. By 2023, however, the disparity between cleantech innovation by these two superpowers had grown. In 2023, China filed more than 10 times as many environmental patents as the US: over a quarter of a million compared with around 25,000. The US political climate’s anti-ESG proclivities will only exacerbate this trend.
It will all end in tears when the US is reliant on China for its energy needs
Someone who truly believes in the anti-ESG cause may consider these facts and reach the following conclusion: so what? If the US is going all-in on fossil fuels and rampant emissions, surely it does not matter that China is racing ahead on renewables and cleantech? This perspective fails to understand that the success of the anti-ESG movement hinges on politics. While the movement has been building its strength for a while, it was Donald Trump’s reelection in 2024 that supercharged it. The Trump presidency will officially end in January 2029, at which point the anti-ESG movement may falter. The scarce and climate-degrading nature of fossil fuels will once again be central to energy policy, and the US might find itself scrambling to secure renewables and cleantech. By this time, China’s lead will have been cemented even further, and US companies will have to rely on China for their energy needs.
