Activist Investors and Market Volatility in 2025: Could the ESG Pressure Disappear?

In the first half of 2025, the global investment landscape is showing notable changes. The number of activist campaigns aimed at corporate reform and sustainability (ESG) has dropped sharply. The key question for markets is whether this is a temporary effect of an unstable economic environment or a sign of a broader shift in investment culture.

The decline of activism: the facts

Data from Activist Insight shows that the number of public campaigns led by activist funds fell from around 50 in 2023–2024 to roughly 30 in the first five months of 2025. The reasons include volatile capital markets, rising interest rates, and geopolitical tensions in Europe and Asia.

“Investors are being more cautious and focusing on stability rather than risking public clashes with company boards,” noted an analyst from Bloomberg.

What is happening to ESG?

A report by PRI and McKinsey highlights a 25% decline in new ESG initiatives in 2025 compared to the previous year. This does not mean sustainable investing is dead. Instead, activists are opting for quieter methods: direct meetings with management and private proposals for change.

At the same time, new regulations like EU SFDR and CSRD in Europe are imposing ESG reporting obligations, keeping the issue alive.

Who benefits and who loses?

Those benefiting from reduced activist pressure include:

• Corporate management, enjoying more freedom for strategic decisions without external influence.
• Short-term-focused investors, who often see ESG priorities as a cost.

But those who lose out are:

• Socially responsible investors, pushing for sustainable practices.
• NGOs and civil society, advocating for corporate accountability.

Possible scenarios

Scenario A: Activism rebounds

If markets stabilize and fund returns increase, activist campaigns could return with a stronger ESG focus.

Scenario B: Silent transformation

The focus shifts to discreet dialogues and internal reforms rather than public campaigns. ESG remains a priority but in a different form.

Scenario C: Long-term decline

Unstable markets and geopolitical uncertainty lead to a lasting pullback from ESG activism, as corporations temporarily pivot to short-term financial goals.

Conclusion

2025 may be a turning point for activist investors and the ESG movement. The question is not whether sustainable investing will survive, but what form it will take in the new economic reality.

Disclaimer:
This article is an analytical review by the BurgasMedia editorial board and reflects the opinion of an expert group based on current political, economic, and social developments.
The conclusions presented are not predictions or factual statements, but a hypothetical interpretation of possible scenarios.
The publication is not responsible for any discrepancies with future developments and encourages readers to form independent judgments based on verified sources.