“In Europe, there appears to be a bit of an attitude that is ‘oh, you poor Americans suffering with your red states and your ESG, sorry about that’. But let me tell you: they’re coming for you as well.”

This warning from Climate Adaptive Infrastructure’s managing partner Bill Green might be seen as a little overdramatic. And yet, during last week’s Infrastructure Investor Network’s Global Summit in Berlin – the stage for Green’s comments – there was a sense that something had changed in relation to the sustainability conversation. Arguably sustainability was the top talking point at last year’s conference, where concerns over greenwashing loomed large. This year it took more of a backseat.

In this sense, the event bore similarities to NEXUS 2024, another PEI Group conference, which took place in Florida earlier this month.

In Berlin, Jakub Skavron, founder of Climate & Sustainable Leaders Czech Republic, even told the audience that ESG has become an “ugly word” in Central Europe.

Part of the reason for this change seems to be the uncertain political landscape. Previously, when ESG advocates sought to justify particular initiatives, they could point to a tightening regulatory net. Embrace sustainability now before you’re forced to later, so the argument went.

Right now, that line of reasoning carries less weight. Countries home to nearly half of the world’s population are due to hold elections in 2024, including nine out of 27 EU jurisdictions, Switzerland, the UK and the US. The possibility of political sea change was clearly on the minds of delegates in Berlin. A keynote panel with The Economist editor-in-chief Zanny Minton Beddoes, much of which was devoted to the ramifications of the re-election of Donald Trump as US President, attracted among the largest and most engaged audiences across the entire event.

What, then, is the upshot of all this? There’s no sign that European LPs will be subjected to anti-ESG legislation, as in some US red states. Nevertheless, managers seem keen to highlight the tangible, short-term benefits of their sustainability efforts.

Multiple panellists spoke of how managing ESG risks can reduce insurance premiums. Quinbrook’s global head of sustainability and impact investment Anne Foster reassured attendees that while many may think the financial benefits of managing ESG risks take several years to become apparent, such an approach can actually deliver “significant capital benefits” to projects “right back to the three-, four-, five-, six-month timeline”. This mirrors the way some US-headquartered managers have zeroed in on materiality as a way to defend ESG efforts.

Ultimately, this shift in the dialogue may prove to be a good thing. Activities that are proven value creators will surely persist whatever political or economic turmoil hits the market. Whether ESG becomes an ‘ugly word’ is another matter.