Skip to content
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
Insurance Journal - Property Casualty Industry News

Featured Stories

  • Chubb Books Record P/C Underwriting Income in Q3
  • ‘Legal Siege’ Against Social Media Companies Looms
  • Articles
  • Jobs
  • Markets

Current Magazine

current magazine
  • Read Online
  • Subscribe
  • Login
  • Front Page
    • National
    • International
    • Most Popular
    • Magazine
    • Forums
    • Blogs
    • Videos/Podcasts
    • Newsletters
  • News
    • Most Popular
    • National
    • International
    • East
    • Midwest
    • South Central
    • Southeast
    • West
  • Magazines
  • Research
  • Directories
  • Jobs
  • Features
    • Events
    • Forums
    • Market Directories
    • Quotes
    • Polls
    • Rankings & Awards
    • Insurance Giving Back
  • Subscribe

Europe Stands Firm Against US-Driven ESG Backlash

April 12, 2024
Email This Subscribe to Newsletter
  • Article

Steady investor demand in Europe for environmental and socially responsible investments and wide-ranging regulation are helping Europe’s finance industry withstand political pressures that have pushed some U.S. peers to backtrack on their green agendas.

In the United States, conservative politicians have been successful in tamping down environmental, social and corporate governance (ESG) product marketing, in diluting regulations that promote ESG disclosures, and in discouraging financial firms from coordinating on curbing greenhouse gas emissions.

But Europe has so far largely resisted the anti-ESG tide, due to greater political and consumer support for greener products and a swathe of regulations that underpin the operations of the finance industry and companies in the real economy.

Some politicians have been active in Europe to soften environmental rules and legislation, highlighting the costs to consumers of going green.

This has led to the watering down of some new regulations promoting ESG in Europe. But fund flow data shows that Europe overall remains an ESG stalwart.

European investors have seven times as much capital in sustainable fund assets than U.S. investors, following five consecutive quarters of U.S. outflows, based on Morningstar data.

“We’ve seen faster regulations lead to faster conformity, which has shielded European financial institutions from ESG headwinds,” said Nathan Abela, head of research at sustainability data tracker ESG Book.

Across Europe’s financial services sector there are 20 rules and 25 voluntary guidelines pertaining to ESG, compared to just two rules and five voluntary guidelines in the United States, according to ESG Book.

There is also more investor demand for ESG in Europe, driven by public pension funds. Some 73% of European pension schemes said climate change was an investment priority in 2023, compared with 53% of U.S. schemes, based on a 2023 LSEG survey.

European financial firms’ commitment to ESG could prove crucial to the survival of international climate alliances. Initiatives such as Glasgow Financial Alliance for Net Zero (GFANZ) and Climate Action 100+ have seen defections by U.S. firms, but their European membership has largely remained intact.

This is important because most of their members are European. One of the GFANZ coalitions for example, the Net-Zero Banking Alliance, has 71 European members but only nine from the U.S. The Net-Zero Insurance Alliance, has eight European firms as members but none from the United States.

Regulatory Support

ESG has a solid framework of regulation in Europe, including the European Union’s Taxonomy, which defines climate-friendly investments. Other key EU rules are the Sustainable Finance Disclosure Regulation, which forces financial groups to disclose their sustainable investments, and the Corporate Sustainability Reporting Directive (CSRD), which applies to companies in the real economy.

Also, people in Europe tend to be more united in their support for climate action.

A 2022 study from the non-profit Pew Research Center, showed Europeans of whatever political leaning were more likely to consider climate change a “major threat.” In the U.S., the study found a big divide on climate views between people on the right and left of the political spectrum.

“In the EU or in Europe, there is disagreement about the importance of this (ESG) but the disagreements are not as wide as that in the U.S.,” said Kamiar Mohaddes, associate professor of economics and policy at the Cambridge Judge Business School.

But Europe has not been immune to attacks on ESG regulations. CSRD and a separate law aimed at ensuring that corporate supply chains are environmentally friendly and protect human rights changed over the past year to cover fewer companies and provide more time to comply.

There has been a dent in European investor demand for ESG but it has been small. New ESG fund launches fell 10% in Europe in 2023, but the slide in the United States was even more pronounced, down 75%, according to Morningstar.

U.S. outflows from sustainable investment funds in the fourth quarter hit $5.1 billion versus $3.3 billion of inflows in Europe, making Europe’s assets under management seven times as great as that seen in the United States.

“What we’re seeing in Europe is everyone continues to be quite focused on ESG and how it is implemented,” said David Zahn, head of sustainable fixed income at asset manager Franklin Templeton.

Zahn said, however, that ESG is not investors’ only concern.

“It’s not just ESG that they care about. They want to see portfolios that take into account ESG, that maybe have some constraints, but they also want performance.”

(Reporting by Simon Jessop in London, Ross Kerber in London and Isla Binnie in New York; editing by Greg Roumeliotis and Jane Merriman)

Copyright 2025 Reuters. Click for restrictions.

Topics USA Europe

Was this article valuable?

Thank you! Please tell us what we can do to improve this article.

Thank you! % of people found this article valuable. Please tell us what you liked about it.

Here are more articles you may enjoy.

‘Massive Legal Siege’ Against Social Media Companies Looms
Florida Jury Awards Jack Nicklaus $50M in Defamation Suit vs. His Former Company
New York Hospital Insurer Files for Bankruptcy, Citing Child Sex Abuse Claims
Can a More Unified Front Be Formed Against Legal System Abuse?

The most important insurance news,
in your inbox every business day.

Get the insurance industry's trusted newsletter

Email This Subscribe to Newsletter
  • Categories: International & Reinsurance NewsTopics: Climate Change, Climate disclosure, environmental social and governance (ESG), ESG disclosure, global warming, greenhouse gas emissions
  • Have a hot lead? Email us at newsdesk@insurancejournal.com
More News
Cards Against Humanity and SpaceX Reach Settlement in Texas Land Dispute
Grounded Paychecks: 60,000 Air Safety Workers Tighten Belts as US Shutdown Drags
NC Commissioner Meets With Residents After More Homes Fall into Ocean
Apple Attacks EU Crackdown in Digital Law’s Biggest Court Test
More News Features

Read This Next

  • Europe Stands Firm Against US-Driven ESG Backlash
  • APCIA Chair Robusto: Industry Must Fight False Narratives, Improve Public Trust
  • Best Agency to Work For – Overall Winner: Robertson Ryan Insurance
  • An Unsustainable Trend – Declining P/C Rates and Rising Cost of Risk: Marsh's Doyle
  • The Government Action Exclusion

Insurance Jobs

  • Claims Manager, Insurance & Risk Management - Queens, New York
  • Business Development Representative - Remote/Pittsburgh, PA/Allentown, PA
  • Regional Sales Manager - Irving, TX
  • Senior Underwriter - Denver, CO ( Hybrid)
  • Customer Service Agent – Personal Lines - Bethlehem, PA
MyNewMarkets
  • Death and Insurance (Not Taxes): Part One
  • AI for Agents
  • How to Attract the Next Generation to Insurance
  • 5 Evolving Trends Shaping Architects and Engineers Coverage
  • Rethinking Assault & Battery Liability in Commercial Real Estate
Claims Journal
  • The US Saw Record $101 Billion in Weather Losses Through June
  • Jaguar Land Rover Hack Cost UK Economy Estimated $2.5B, Report Shows
  • Ford Recalling 1.4 Million US Vehicles Over Faulty Rear-View Cameras
  • Ice Dams Are Actually A Common Risk: What Claims and Insurance Pros Should Know
  • Jeep Factory Halted for Three Weeks After Aluminum Plant Fire
Academy of Insurance education
  • October 21 E&S Property Underwriting
  • October 23 Gotchas That'll Getchya - Latest Policy Language That'll Get You Sued
  • October 30 Challenges in Agency Mergers – Reducing Staff Flight and Avoiding E&O Claims
  • November 6 Risk and Insurance for Digital Nomads

Insurance News

  • News by Region
  • News by Topic
  • Yesterday

Site Search

Features

  • Insurance Markets Directory
  • Forums
  • A.M. Best Company Ratings
  • Industry Events
  • Agencies For Sale
  • Newswire
  • Insurance Jobs
  • Rankings & Awards

Connect with us

  • Email Newsletters
  • Magazine Subscriptions
  • For Your Website
  • RSS Feeds
  • Twitter
  • Facebook
  • LinkedIn
  • Do Not Sell My Info

Insurance Journal

  • Submit News
  • Advertise
  • Subscribe
  • Reprints
  • Link to Us
  • Contact Us

Wells Media Group Network

  • Insurance Journal
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
© 2025 by Wells Media Group, Inc. Privacy Policy | Terms & Conditions | Site Map