Paris is a perilous place for anyone with a weakness for pastry. I left the City of Light rounder in my middle – padded by croissants, Camembert and the crimson warmth of good red wine. But it wasn’t just indulgence that left a mark. The heat was oppressive, more July than June, the kind that melts mascara and kindles tempers. London was no better. Both cities were sweating through early heatwaves and each sticky step through their streets hammered home a truth: climate change is real. Yet, these are strange times. ESG is a dirtier word than any whispered in a Paris alley.

Investors pulled a record amount from sustainable funds in the first quarter of this year. US investors have cut exposure for 10 straight quarters, while in Europe – long considered the bastion of ESG alignment – net redemptions topped $1.2 billion. For the first time since 2018, Europeans are walking away. And 335 funds dropped ESG-related terms from their names.

For investors and executives, ESG has shifted from rallying cry to reputational hazard. It’s now discussed in hushed tones or avoided in board-rooms and investor meetings. The backlash is real, political and powerful. But pretending the pressures have disappeared doesn’t make them go away. The underlying risks – climate expo-sure, labour rights, supply chain fragility – are as material as ever. In fact, they’ve intensified.

Dropping the term ESG because it’s unpopular doesn’t erase the reality it describes. Investors must ask pointed questions about climate exposure, regulatory readiness and long-term viability. And consumers must remain alert. Climate events are becoming more frequent, more damaging and more expensive. The pressures haven’t disappeared. They’ve just become harder to talk about. That silence creates a strange dissonance. Internally, many companies – asset managers among them – are still investing in sustainability teams, tools and systems. The work continues. But externally, the narrative has quietened. Boards are designed to avoid risk, not invite controversy, and executives are navigating a messy intersection of market pressure, political hostility and operational strain. For some, retreating from ESG talk is strategic, to avoid controversy. For others, it reveals something deeper: their commitment was brittle, built for fair weather, not headwinds.

Even among leaders who believe in sustainability, I hear less about aspiration and more about survival. They’re not asking, ‘How do we lead?’ but ‘How do we stay standing while doing this?’. Legal teams are on the defensive. CFOs are nervous. Strategy and marketing are watching every word. CEOs – particularly in the US – are trying not to make the wrong enemies.

But let’s be honest: not every company was serious about it. ESG became popular, but popularity is not the same as conviction. Some firms used the language when it suited them – to attract capital, dodge criticism or ride a trend. Now that it’s uncomfortable, they’re stepping back. But those who embedded ESG into governance, strategy and operations? They’re still there. Quieter, perhaps, but resolute. For investors, this is a clarifying moment. The backlash isn’t just a corporate story. For too long, the sustainability conversation has excluded too many. It became technocratic, dense with acronyms and targets – net zero, Scope 3, transition taxonomies. These may be essential terms, but they are hardly compelling. Meanwhile, opponents told a simpler, louder story: ESG is a threat to jobs, autonomy, national identity.

What’s needed now is a pivot away from ESG as branding, towards ESG as strategic foresight. A method for identifying disruption, allocating capital, managing transitions and measuring real risk-adjusted returns. This means tighter links to business outcomes – efficiency, talent, market relevance. And clearer communication about trade-offs. Not every initiative will deliver short-term gains, but that doesn’t make it wrong.

Analysts suggest that what’s needed isn’t just different messaging – but deeper thinking. Equity research firm Bernstein has proposed reimagining ESG as ‘ESD’ – emerging, strategic and disruptive factors – a broader lens for a more complex world. It believes ESG has lost meaning because it’s been fenced off from broader conversations about geopolitical upheaval, supply chain risk, AI disruption and the competitive dynamics reshaping entire industries. Climate threats and labour stan-dards remain central; but they should be viewed as integral to strategy, not separate from it.

This phase will pass. The backlash, the headlines, the discomfort will fade. But the fundamentals won’t. The fires, floods and fragilities are not waiting for better politics.

The firms that endure won’t be those that retreated fastest. They’ll be the ones that held on; that understood ESG not as branding, but as ballast. That recognised the world is changing – and resilience is not a slogan. It’s a strategy.

By Sasha Planting