Companies are struggling with their climate goals amid backlash against “woke capitalism,” experts say

ABC News looks at solutions to problems related to climate change and the environment with its series “The Power of Us: People, The Climate, and Our Future.”

Corporate America took notice four years ago when Larry Fink, CEO of investment giant BlackRock, declared climate change a top priority. “Climate risk is investment risk,” Fink wrote in an annual letter popular among C-suites.

His latest letter, released last month, runs to more than a hundred paragraphs before the first mention of “climate.” While Fink mentioned “climate” a total of 29 times in the 2020 letter, he wrote it only four times in last month’s message.

The shift in Fink’s letters coincided with an apparently broader dynamic behind climate action among many of the world’s largest companies, which have faced a conservative backlash against sustainable business practices derided as “woke capitalism,” experts told ABC News .

Many companies are struggling to meet ambitious, long-standing climate pledges, partly due to high interest rates that make financing more expensive, the experts added, noting that some environmentally conscious companies have bucked the trend.

“BlackRock is still considering climate risks, but the message has changed,” Mindy Lubber, CEO of the environmental organization Ceres, which researches corporate behavior, told ABC News.

“The backlash has been intense and severe, and we are seeing things slow down,” Lubber added.

BlackRock did not respond to ABC News’ request for comment.

In a statement on its website, BlackRock said a global transition to net-zero carbon emissions by 2050 “would benefit the global economy and our customers in aggregate.” In turn, BlackRock is encouraging clients to develop “robust transition plans” by 2030, the statement added, noting the limitations of BlackRock’s role as an asset manager.

“BlackRock’s role in the transition is that of a fiduciary for our clients,” the statement said. “Our role is to help them navigate investment risks and opportunities, not to deliver a specific outcome of decarbonization in the real economy.”

Just over half of the world’s 2,000 largest companies have made commitments to achieve net zero carbon emissions, according to data from research firm Net Zero Tracker, reviewed by ABC News. Net zero marks the point at which a given company offsets its emissions by removing the same amount of carbon from the atmosphere.

The number of companies with a net-zero commitment has increased by 40% in the past 16 months, the data shows. However, the vast majority of the company’s commitments are not credible, Net Zero said, noting that only one in 20 commitments meet United Nations guidelines for what constitutes a quality promise.

To meet the UN threshold for a quality pledge, a company must adopt a plan to address all forms of carbon emissions, present interim targets for emissions reductions by 2030 and align its government lobbies with the net zero target, among other goals.

“There is undeniably a huge lack of quality in these plans,” John Lang, project leader at Net Zero Tracker, told ABC News. “We just haven’t seen any momentum or movement on that.”

“It’s easy to set a goal,” Lang said. “It is much more difficult to create a robust plan to achieve that goal.”

Dave White, director of the Global Institute of Sustainability and Innovation at Arizona State University, said the evidence that major companies are delivering on their climate pledges is “mixed at best.”

“We have seen significant progress, but many of these companies realize they are achieving only a small fraction of the ambitious goals they set,” White said.

Experts who spoke to ABC News attributed the business woes to a wave of conservative criticism of sustainable business practices and high interest rates, which make it more expensive for companies to pursue capital-intensive climate initiatives.

Conservatives have focused much of their ire on environmental, social and governance investing, or ESG, a form of investing that takes into account non-financial information about a company, such as its climate impact and diversity from the staff.

Prominent Republican politicians, such as Florida Governor Ron DeSantis, have attacked ESG as a portfolio strategy that prioritizes liberal objectives over investor returns. Eighteen states have passed anti-ESG legislation — and all but one have a Republican governor, law firm K&L Gates found in July.

“When it comes to things like these Wall Street banks, what they are doing to impose an agenda is something that is very, very troubling,” DeSantis said last May as he signed a law banning government officials from investing public money in ESG objectives.

Some on the left have questioned the accuracy of ESG funds, warning that they do not set sufficient standards for companies seeking to qualify.

ESG investing has since declined sharply. Globally, funds categorized as “responsible investing” received $68 billion in net new deposits from 2023 through November, according to data from financial firm LSEG Lipper. That amount had fallen dramatically from $158 billion for all of 2022 and $558 billion for all of 2021.

The response from conservatives has hampered corporate behavior in the ESG sector, including carbon emissions obligations, according to White.

“The politicization of this area in some cases provides companies with cover to avoid meeting their obligations,” White said.

It’s fair to say that some companies have continued to make progress toward achieving net-zero emissions, some experts said, noting that the recent hiccup in climate action is more due to the size of the task than to the unwillingness of the companies.

“The transition to a carbon-neutral economy that we are experiencing is really a transition on the scale of the Great Industrial Revolution,” George Georgiev, a professor at Emory University School of Law, told ABC News.

“I don’t think it’s a cut; it’s more a professionalization of the function within companies and that they need to be more careful,” he added. “We’re probably not going fast enough, but that doesn’t mean we can’t adjust course.”