Has Cancel Culture been Cancelled?
America’s culture wars can feel like an endless cycle — noisy, polarising, and constantly shifting. As a London-based asset manager with a global investment universe, we carefully observe from across the Atlantic; not deeply entangled but certainly interested as we monitor any impact on the companies in which we invest.
We think globally, not just through a U.S. lens. The companies we invest in are multinational, and whilst these tensions are currently most pronounced in the U.S., they vary across the world. Debates over free speech and corporate responsibility look different in Europe, Japan, and Sub-Saharan Africa, reinforcing why no single market’s politics at a point in time should dictate investment decisions.
Our job is not to pick sides in political debates or speculate on election outcomes. We invest in businesses built to endure, favouring those that are resilient and that can adapt, creating long-term value regardless of who holds power in any given jurisdiction.
A Tainted Acronym
President Trump’s Make America Great Again (‘MAGA’) movement has launched a stampede against ‘wokeism’. ESG, once a framework for assessing long-term risks and opportunities, has been caught in the crossfire, recast as ideological and now facing fierce opposition.
Source: Google Images, 31 March 2025
But is ESG truly ‘woke’? Or has it simply become collateral damage in a larger political battle? The answer matters — not just for politics, but for how businesses and investors navigate risk, strategy, and long-term sustainable returns.
ESG need not be inherently controversial. The debate comes from how the term has been stretched to cover vastly different investment approaches. It has been used to describe both values-driven investing with explicit environmental or social goals, and (from Troy’s viewpoint) the integration of material non-financial factors into investment decisions to maximise long term financial returns. This blurred meaning and ambiguity has fuelled confusion and contention. “ESG” has become so politicised that any mention of it can now spark strong reactions — positive or negative, depending on the audience.
At its core, ESG is about risks and opportunities that drive long-term value. It is a fundamental part of investing. At Troy, we have always maintained a clear distinction between ESG integration and ethical investing. We assess ESG factors not as a moral stance, but because they can be material to a company’s long-term financial performance. We invest in businesses with leaders who make smart decisions, treat stakeholders fairly, and manage external risks because failing to do so can threaten a company’s right to operate. It is about understanding how potential risks and opportunities impact returns, not ideological positioning.
This approach is reflected in our recent discussions with companies. Over the past quarter, Troy met with Next, a UK-based retailer, to discuss labour rights and supply chain management, and had a meeting with Link REIT to discuss how they are strengthening resilience against extreme weather risks for properties in the Greater Bay Area, Hong Kong. These conversations demonstrate how ESG factors, when assessed through the lens of long-term value, are essential to evaluating business resilience.
The U.S. Corporate Retreat
President Trump’s promotion of deregulation and the fight against ‘wokeism’ have led companies to rethink, scale back, or even reverse certain sustainability commitments. DE&I (Diversity, Equity & Inclusion) and Net Zero initiatives are in retreat, with firms toning down rhetoric, restructuring programs, or reducing reporting to avoid scrutiny.
In money management, cognitive diversity is considered essential. At one point, there were more UK fund managers named Dave than there were women managing funds[1] — a striking reflection of the investment industry’s gender diversity gap. While progress has been made, it raises a broader question: does diversity in decision-making improve outcomes, and should businesses prioritise it?
To make sense of a fast-changing world, we need broad perspectives, open discourse, and more than just our own viewpoints. We apply these principles to corporate boards, encouraging greater diversity, though never at the expense of meritocracy. It is not about quotas, but about ensuring leadership teams reflect the breadth of perspectives that exist across their customer bases and their employees.
Even as some of our companies scale back formal DE&I targets or move away from quotas, they continue to prioritise talent retention, leadership development, and workplace culture, because strong businesses depend on high-performing teams.
Meanwhile, Net Zero remains a long-term goal for many, but some firms are delaying targets and scaling back disclosures to sidestep the ESG backlash, a sign of the political tightrope they are walking. But with wildfires ripping through California and hurricanes battering Florida, the need to build resilience against extreme weather isn’t up for debate, it’s a reality.
Meta’s Moderation U-Turn
One of the most controversial shifts in corporate America has been Meta’s change in stance on content moderation, reflecting the broader debate around free speech and platform responsibility.
The free speech debate in the U.S. has deep historical roots and has swung in both directions. In the 1960s, it was a liberal cause, protecting civil rights activists and anti-war protesters from government repression. By the 1980s, the push for speech codes to combat discrimination led to a backlash, with critics arguing it stifled open discourse under ‘political correctness.’
The internet era introduced new challenges, amplifying both speech and misinformation. The 1996 Communications Decency Act attempted regulation, but Section 230 shielded tech companies from liability. By the 2010s, the debate had evolved again, as companies grappled with content moderation, misinformation, and the fine line between free expression and harm.
Meta recently announced significant changes to its content moderation policies, aiming to reduce censorship and promote free expression. These changes include eliminating third-party fact-checking in favour of a community-based notation system, relaxing certain content restrictions, and relocating moderation teams to address algorithmic bias concerns.
Given its timing, it is perhaps easy to be cynical about these changes. As shareholders in Meta, we recognise the challenge that the company faces in balancing free speech with user protection and platform governance, especially across hundreds of jurisdictions. Content moderation decisions directly impact user trust, community engagement, and ultimately, Meta’s ad-driven business model.
Open debate is fundamental to a thriving society but failing to set clear boundaries risks enabling harm. Striking the right balance is crucial. In recent years, Meta leaned heavily into content censorship, responding to regulatory, political and societal pressures. Now, it is pulling back, shifting back towards a more open approach to speech, and taking advantage of a community-based form of content moderation. While this course correction may ease concerns about big tech overreach, it also brings new risks around content quality and user engagement.
At recent company AGMs, Troy has supported resolutions to strengthen protections for minors and increase transparency around AI-generated content and its role in shaping user experiences, particularly in relation to misinformation. How Meta navigates these issues will be central to its long-term prospects.
Winds of Change
“In a democracy, the opposition is not permanently silenced. It is merely waiting for its turn.”
– Amartya Sen
Like many market narratives, the ESG debate has swung to extremes. Some of its strongest advocates overreached, and in the wake of the pandemic, certain policies and expectations went too far. Now, we are seeing a sharp pullback — but as with any correction, there is a risk of overcorrection. ESG has become so politicised that it is now a battleground, forcing investors to take sides rather than engage with substance. Yet beyond the rhetoric, good governance, effective resource management, and sound leadership still matter.
Throwing the Baby Out with the Bathwater
This quarter, several members of Troy’s investment team travelled to the U.S. to meet with companies firsthand. Aniruddha Kulkarni attended a leading consumer goods conference in Florida. Tom Yeowart visited Visa’s Investor Day in San Francisco, and George Viney travelled to New York to meet with internet and payments companies. It is clear that even if the term “ESG” is being used less, the core issues remain on the agenda. Food companies still prioritise health and nutrition, just as payments firms continue to grapple with regulation and data privacy. The terminology may have changed, but the fundamentals have not.
We invest in companies that are resilient, adaptable, and equipped to navigate different economic and regulatory environments. This approach shapes our stock selection across all Troy portfolios, as we focus on companies with lasting competitive advantages. Visa benefits from the long-term shift to digital payments, RELX leverages proprietary data and AI-driven insights to reinforce its industry leadership, and global technology leaders like Alphabet and Microsoft are well-positioned to capitalise on continued migration to the cloud. Each of these businesses is built on powerful secular trends that will outlast political cycles, reinforcing their ability to compound value over the long term.
At Troy, ESG was never about right or wrong. It has always been about what matters to a company’s long-term financial performance. We focus on the factors that could affect a company’s bottom line or hinder its ability to grow its top line, whether that be governance failures, shifting consumer trends, or regulatory risks. No matter where we are in the shifting culture wars, our focus remains the same: investing with discipline in resilient, global businesses with exceptional financial profiles, built to create sustainable returns over time.
[1] Morningstar, 2021
Further information relating to how ESG integration is applied to the fund can be found in the fund prospectus and investor disclosure document. For further information relating to Troy’s approach to company voting and engagement, please see Troy’s Responsible Investment and Stewardship Policy available at www.taml.co.uk.
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