The Backlash is Backfiring: The Institutionalization of ESG

Amid political pressure and persistent "ESG retreat" narratives, Millani's latest Investor Sentiment Study tells a different story.

Key findings

• 97% of institutional investors report a very high level of continued commitment to integrating ESG into investment decision-making – with a sharper focus on financial materiality.
• The so-called backlash has not led to divestment or disengagement. It has reinforced ESG's institutionalization within mainstream capital allocation.
• 94% of investors are already using AI in issuer analysis and expect usage to grow in 2026. As adoption accelerates, silence becomes a risk – with AI-driven proxies and hallucinations potentially filling information gaps.

In short: ESG isn't retreating. It's evolving – and becoming more embedded, more financially grounded, and more technologically driven.

About the study

The study is based on interviews with 36 Canadian institutional investors representing $10.3 trillion in assets under management.

The backlash is backfiring: The institutionalization of ESG