Selling sustainability: how ESG marketing overlooks moral complexity

Abstract

Environmental, Social, and Governance (ESG) investing has surged in popularity, yet faces increasing politicization and scrutiny. This paper argues that current ESG marketing problematically overlooks moral pluralism and complexity. We conceptualize ESG marketing as the supply side of ESG morality, less studied than the demand side (investor preferences). A mixed-methods study, including topic modeling, qualitative categorization and close reading of 99 ESG marketing documents from top global asset managers was conducted. Principal results show that ESG marketing emphasizes environmental (E) themes, particularly climate change risk mitigation, being more cautious about controversial social (S) issues. Moral arguments in ESG marketing often center on safety for investors provided by ESG risk management, largely disregarding moral pluralism and the now-polarized nature of ESG. Marketing downplays complex ethical trade-offs and often claims moral neutrality despite inherent value judgments. We argue that this simplified morality may contribute to ESG backlash and suggest that acknowledging moral pluralism through what we term moral diversification is vital if moral considerations are brought into investing practice.