Wall Street Starts Calling Time on ESG Labels After Backlash

At Institutional Investor, keeper of Wall Street’s version of the Oscars for financial analysts, the winner in one category this year is — nobody.

The red carpet is being formally rolled up for the three letters, ESG. The 57-year-old II has dropped the label, short for environmental, social and governance, from its annual analyst rankings.

In its place is “sustainability,” a synonym many banks and money managers are using instead, amid the increasingly politicized debate over climate change and corporate diversity in the US.

This is how it is these days for ESG in American finance. The label, which emerged ...