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Earlier this month, Vanguard, the world's largest asset manager, quit a net-zero banking alliance saying it wanted more independence and more clarity about its ESG commitments to investors.

Then, a week later, HSBC, the UK-based, developing world-focused lender, announced it would suspend direct financing and advisory services to new oil and gas projects, bowing under the pressure of shareholders and environmental activists.

The two events seem completely unrelated, but they are signs of things to come: fractures in the ESG investment movement are appearing--and they are likely to grow bigger at a time when consumption of fossil fuels is set to hit a new high.

The Net Zero Asset Managers alliance, set up just two years ago, brought together asset managers worth a combined $66 trillion. It later joined the UN-backed Glasgow Financial Alliance for Net Zero, led by former Bank of England governor Mark Carney.

In October, banks including JP Morgan, Morgan, Stanley, and Bank of America, threatened to leave the UN-backed group of ESG-conscious financial institutions on the concern of breaking U.S. antitrust legislation if they comply with the GFANZ guidelines for making investment decisions.

It is in legislation that the biggest cracks are appearing, after Republicans regained a majority of the lower house of the U.S. parliament and began a crackdown on ESG investments and the possibility of such investments violating antitrust law.

It is these same Republicans, both in Congress, and in states, that are mounting pressure on asset managers and banks with regard to their ESG commitments. And some are pulling out their investments from the majors: Florida recently pulled out $2 billion worth of investments from BlackRock because of its ESG agenda.

Texas has also threatened to pull out its investments from large asset managers if they continued to be antagonistic to the oil and gas industry. In a rare example of vulnerability, BlackRock had to assure the Lone Star State that it is not, in fact, against oil and gas, which in turn prompted a backlash from its more ESG-minded, climate-conscious investors.

But while pressure in the United States is growing from legislators interested in the legality of some ESG commitments, the HSBC case suggests that elsewhere it is still shareholders with a taste for ESG investing who are keeping the upper hand.

That's despite the fact that doubts are beginning to appear around the actual profitability of such investing, which was supposed to be superior to traditional investment. The evidence of these higher returns seems to lack credibility and, perhaps more importantly, the actual benefits of ESG investing for the planet also seem to be not there.

Because of this pressure, HSBC had to quickly update its policies and commit to refusing financing to those prospective oil and gas clients who plan to allocate more than 10 percent of their capital spending on project exploration, which would be most of them.

Yet this commitment seems more symbolic than actual. Per the Financial Times, most of the financing HSBC has been providing to the oil and gas industry is financing not tied to specific projects and, by implication, it is financing that the bank could continue to provide even after this latest commitment.

So, the picture that emerges is one in which ESG supporters and climate-conscious investors continue to be loud in their criticisms and calls for action, but another reality is reasserting itself: a reality in which there are more important things than climate commitments. Things like law abiding and keeping investors on rather than seeing them go.

It is a tough position for asset managers to be in. On the one hand, conservative investors such as the states of Texas and Arizona, threaten โ€” and make good on their threats โ€” to pull out their money if the ESG push gets too strong. On the other, there are the climate-conscious investors that make similar threats.

With GFANZ, things came to a head earlier this year, when Race to Zero, the UN initiative that was setting standards for financial institutions with a view to net-zero commitments, threatened banks to expel them from the net-zero alliance unless they restricted "the development, financing and facilitation of new fossil fuel assets."

Since this is nothing short of outside interference in corporate decision-making, it was only to be expected that banks would balk at it. The directive was later softened, language-wise but the fact remained that banks have limits to the ESG pressure they are willing to take.

In this context, what is happening now with Vanguard and HSBC could be seen as yet more signs of those limits, especially when compliance of antitrust legislation is on the line with some legislators suspecting the existence of "climate cartels" and eager to investigate them.

Meanwhile, cracks are beginning to appear in the investor push for Big Oil to become more climate-conscious, too. While the past couple of years saw many climate-related resolutions tabled by environmentalist shareholders pass in the most climate-unfriendly industry, this year everything changed.

Climate resolutions failed repeatedly at Big Oil general meetings because a new priority emerged, trumping environmental, social, and governance: energy security. And it's not going away for a while.