By Virginia Furness

LONDON (Reuters) – A JPMorgan executive stated that the political backlash against environmental, social, and governance (ESG) issues in the U.S. is overstated and minimally affects the green economy.

While some companies and investors are mentioning sustainability less frequently, they are still allocating funds similarly to their European counterparts, according to Chuka Umunna, JPMorgan’s global head of sustainable solutions, at the Reuters Energy Transition conference in London.

Umunna remarked, “If you peel away all the noise and look at what investors are doing, it isn’t so different, albeit they may not be using the labels quite in the way that we do in Europe.” He emphasized that the U.S. is not significantly retreating due to the politicization of ESG, arguing that the situation in the states is more nuanced.

Several U.S.-based investors, including JPMorgan’s fund arm, have distanced themselves from global climate coalitions this year amid a contentious political landscape, with some Republican politicians claiming membership could violate antitrust rules.

Despite more anti-ESG resolutions being proposed during the last proxy-voting season, less than 2% succeeded, and under 10% of anti-ESG bills passed at the state level. Although funds seeking investments in Republican states may adjust their presentations, large global clients of JPMorgan’s fund arm generally follow a uniform investment policy worldwide.

Umunna noted that for U.S. companies seeking investment or loans, inflation, supply-chain challenges, and high interest rates present more significant hurdles than the noise surrounding ESG issues. He questioned whether the current rhetoric is truly affecting valuations, suggesting that deeper, fundamental issues are at play.