The politicization of ESG investing shows why ESG metrics cannot be depoliticized

The growing political tension surrounding environmental, social, and governance (ESG) investing is not simply a dispute over terminology. It reflects a deeper conflict over whether climate and social crises can be governed through financial metrics without confronting the political-economic structures that produce them. ESG was originally framed as the integration of financially material environmental, social, and governance issues into investment decisions; its tools may influence corporate behaviour through stewardship, disclosure pressure, risk pricing, or capital allocation, but such effects are contingent rather than intrinsic to ESG itself. It should therefore not be treated as equivalent to impact investing, where intentional and measurable social or environmental impact is part of the investment mandate. Yet in public discourse ESG is often marketed as if it could simultaneously protect returns, decarbonize the economy, and demonstrate corporate virtue. This slippage has made ESG vulnerable to attack from both the right and the left. On the right, anti-ESG campaigns fold climate politics into broader anti-“woke” narratives, fiduciary-duty claims, and reactionary defences of fossil-fueled social order. On the left, critics target ESG’s vague criteria, weak evidence of real-world impact, and role in legitimizing greenwashing and investor power. Rather than calling for depoliticized ESG metrics, which is self-contradictory since metrics are themselves political choices, I argue for narrower and more contestable uses of ESG metrics: clearer distinctions between ESG integration and impact investing, stronger disclosure and anti-greenwashing rules, and more public accountability over how sustainability is measured and mobilized. For climate policy scholars, the ESG controversy demonstrates both the strategic value and the political limits of economic frames in climate communication.