I started this week in the company of private fund lawyers. The world’s legal eagles had descended on London for the International Bar Association’s conference, and I had been invited to an evening drinks event to say a few words about the market.

Whereas my remarks would be sustainability-focused, the topic du jour over drinks was – unsurprisingly – the collapse of SVB and how lawyers spent the weekend trying to ensure that GP clients would retain access to various funding lines. Indeed there has been much for private markets firms to think about amid the collapse of a bank that was so intertwined with the PE and VC world.

What I had not grasped at the time was the extent to which SVB’s failure would be co-opted as a data point by proponents of the “ESG backlash”. Search Twitter for “woke bank” and you will find a torrent of opinions blaming – either explicitly or implicitly – the bank’s demise on its “woke” positioning, which in this case seems primarily to be a reference to its progressive approach to DE&I.

This is not confined to Twittersphere ramblings. An opinion piece published on Sunday by the Wall Street Journal analysed different factors that led to the bank’s collapse, signing off by highlighting the fact that the SVB board comprised 45 percent women, as well as “one Black, one LGBTQ+ and two Veterans”.

“I’m not saying 12 white men would have avoided this mess,” wrote the columnist, “but the company may have been distracted by diversity demands.” It may be phrased in a roundabout way, but the implication is as clear as it is unpleasant: that the presence of non-white, non-males on the board should be considered as a potential contributing factor.

One of my observations on Monday was that, amid increasingly politicised and polarised views on ESG – as documented by listed private markets firms in their annual filings this year – the term “ESG” may well find itself falling out of favour; investors and managers would find other ways of discussing sustainability-related risks and opportunities. I also suggested that use of the phrase “impact investing” would recede, as managers chose to align with impact themes – think climate or financial inclusion – rather than the concept of “impact”. The toxicity of the “go woke, go broke” narrative around the SVB collapse does little to dissuade me from this view.

Perhaps BlackRock chairman and CEO Larry Fink’s much anticipated (and later than usual) letter to investors, which was published on Wednesday, is a sign of things to come. Reporting by our colleague Dominic Webb on affiliate title Responsible Investor (registration or subscription required) notes that the letters “ESG” don’t appear once in the 9000-word letter. There is also no mention of racial justice or racial equity, which appeared in the 2021 and 2022 letters to CEOs. The letter is not a sustainability free zone; the energy transition features heavily, positioned as a material investment trend, rather than any sort of moral imperative. “We have clients who want to invest in ways that seek to align with a particular transition path or to accelerate that transition. We have clients who choose not to. We offer choice,” Fink writes.

If Fink’s letter is anything to go by, expect managers to be more cautious how they discuss sustainability. Hopefully their actions will speak for them.