Investors abandon the causes that aroused after Donald Trump’s victory

Investors are turning their backs on the causes that arose after Donald Trump’s electoral victory in the United States.

A report from investment bank Jefferies said fund managers are more willing to speak out against environmental, social and governance (ESG) and diversity, equality and inclusion (DEI) issues.

Analysts at the brokerage described the trend as a “woke stampede” that has accelerated with Trump’s re-election.

The shift was reinforced this week when Meta founder Mark Zuckerberg said he will abandon fact-checkers on Facebook and Instagram, saying they were “too politically biased.”

Jefferies analyst Christopher Wood said: “It can legitimately be described as the woke stampede.”

‘Since Donald Trump’s decisive election victory in November, we have noticed a change in behavior in ongoing meetings with investors.

“Fund managers are increasingly willing to say what they really think, even in the presence of colleagues, on topics as politically charged as environment, social and governance, or diversity, equity and inclusion.”

Zuckerberg and other tech founders are trying to reach out to Trump, who was previously banned from Facebook, before he returns to the White House later this month. The president-elect and his Republican allies have criticized Meta for what they called censorship of right-wing opinions.

Wood added: “Meta will probably no longer need to employ so-called content moderators who, from a shareholders’ perspective, were a complete waste of money.”

Trump’s election has been a boost to a trend that has been brewing in the United States and has begun to take hold in the United Kingdom.

Some London-listed companies have begun to move away from “woke” initiatives amid investor backlash. Last year, Unilever watered down its targets on plastic packaging, worker pay and diversity.

The £95bn giant, owner of brands such as Dove and Hellmann’s, had previously pushed the idea that businesses should do well in the world.

But investors, including star fund manager Terry Smith, accused the company of “missing the plot” and prioritizing its woke credentials over shareholder returns.

In the fourth quarter of last year, investors withdrew £1.3bn from ESG funds, according to research from global fund network Calastone.

This followed outflows of £261m in the previous quarter and inflows of almost £4.5bn in the first half of the year.