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The push for environmental, social and governance considerations in investing has suffered high-profile setbacks over the past year, but there are signs that the movement is evolving. Surging energy stocks in 2022 hurt the performance of many of the largest funds, and political backlash has gained traction with several states moving to block state funds from being invested in ESG products. Strive Capital co-founder Vivek Ramaswamy used that firm’s anti-ESG approach to help launch a longshot bid for the 2024 Republican presidential nomination. Some asset managers, most recently State Street , are experimenting with new proxy voting tools after the lack of democratized voting was criticized by some on the right, and the backlash may already be having an impact on cash flows into some funds. According to AllianceBernstein, there were $12.1 billion of outflows from ESG funds in North America during the first quarter, although that was due to large outflows from a handful of funds. “This was primarily driven by redemptions from a few large passive ESG funds (e.g., iShares ESG Aware MSCI USA ETF ) due to underlying investors rebalancing their factor exposure. Clearly the political backlash against ESG also weighed on sentiment and demand for ESG products in North America,” AllianceBernstein’s Zhihan Ma said in an early May note to clients. ESGU 1Y mountain Some major ESG ETFs, including the ESGU, have shed assets and underperformed the broader market over the past year. But there was a stark contrast between the approach to ESG in the U.S. and across the Atlantic. There were $2.7 billion of inflows into ESG funds in Western Europe during the first quarter, according to Bernstein. And the U.S. investment industry is not abandoning the trend. “The ESG backlash will continue. In some ways, the ESG backlash is here to stay. But ESG is here to stay, too,” Aniket Shah, global head of ESG and Sustainability Strategy at Jefferies, said on a call with investors last week. While some fund complexes are plowing ahead with broad new ESG funds, such as Morgan Stanley’s Calvert suite , others are finding success with narrower products that may not be explicitly marketed as ESG per se, but check many of the same boxes that those investors want. “On the back of the recent political backlash and the sheer amount of misinformation about ESG, it is likely that the term ESG will continue to evolve — perhaps it could be broken down into sub-topics or evolve into similar terms like ‘sustainable’ or ‘responsible’ investing,” Ma said in a mid-May note to clients. Human Capital Factor One group of products that is finding some success is the Corporate Culture funds from Harbor Capital and research fund Irrational Capital. The Harbor Corporate Culture ETF (HAPI) has more than $200 million in assets and has outperformed the MSCI USA Large Cap Index and the S & P 500 year to date, although it has little trading volume. The new Harbor Corporate Culture Small Cap ETF (HAPS ) has already surpassed $100 million in assets in less than two months on the market. The funds are constructed using publicly available data and survey data to gauge the sentiment of employees, trying to determine how happy they are at their company in ways that go deeper than just their take-home pay. Kristof Gleich, president and chief investment officer at Harbor, said that he views the research on human capital done by Irrational Capital as a new type of investing factor. JPMorgan’s global quantitative & derivatives strategy team has said in research notes that the “Human Capital Factor,” as defined by Irrational, does appear to lead to long-term outperformance. David van Adelsberg, co-founder of Irrational Capital, said that the firm is “bipartisan” on the issue of ESG and that the funds’ main goal is beating the market. “The way that we position is that when companies do the right thing, it pays. And we’ve proven it,” Van Adelsberg said. Gender equity There also appears to be new interest in funds focused on gender equality issues, including the BNY Mellon Women’s Opportunities ETF (BKWO) , which launched in May . That space already has a few similar funds, including the Impact Shares YWCA Women’s Empowerment ETF (WOMN) , which debuted in 2018. “We’ve just seen the interest in the YWCAs and our voice magnified to a huge degree just because of our participation with this product. It’s really helped us reach new donors, new audiences … and engage with corporations about these criteria and what they can be doing in the workforce,” said Jill O’Donovan, an advisor to the WOMN fund and former chief innovation officer at YWCA Metropolitan Chicago. Green investing And there are already many different thematic funds for investors who want to bet on green energy, such as the $2 billion Invesco Solar ETF (TAN) . One interesting wrinkle comes from activist fund Engine No. 1. The firm, best known for successfully pushing to replace several board members at ExxonMobil, now has three ETFs, including the $100 million Transform Climate ETF (NETZ) . Engine No. 1 does not call NETZ an ESG fund, and instead of excluding carbon-emitting companies like some green-focused ETFs, the fund holds companies where shareholder voting could drive change in industries that are carbon-heavy. Some of the fund’s top holdings include Applied Materials, Waste Management and Union Pacific . — CNBC’s Michael Bloom contributed to this report.