It appears that ESG might be seeing its end and the final gasps are right around the corner. 

Over the last year, "Environmental, Social, and Governance" (ESG) funds have taken a huge hit as states, companies, and investors alike have been moving away from the policies and money wrapped up in what is now being seen as a financial fad. 

According to Bloomberg, Japanese investors are the latest to walk away, taking billions of dollars with them: 

Investors pulled a total of 660 billion yen ($4.5 billion) from funds last year, according to the research firm Morningstar. That’s more than four times the outflows of 150 billion yen in 2022.

The shift is due to investors favoring mutual funds focused on specific investment themes rather than sustainability goals related to ESG funds. In 2021, ESG funds boomed in Japan with total inflows of 1.8 trillion yen. Now investors are more interested in areas such as foreign index funds.

“Rather than being a response to investor demand for sustainable investments, ESG was seen as a theme,” said Daisuke Motori, director of manager research at Morningstar Japan

This doesn't mean that ESG is completely done. More money is still flowing into these funds than out, however, the hits that these funds have recently taken have put enough holes in the hull and the ship is beginning to sink. As Bloomberg reported, there have been no ESG products created from October to December of last year. 

None of this should be surprising. ESG has cost corporations trillions of dollars as embracing these policies has driven away customers and investors alike. Boycotts have resulted in a loss of $5 trillion worth of "sustainable investing assets" and in the U.S. alone, ESG funds decreased by 50 percent. 

(READ: You’ve Cost the ESG Movement Trillions and Congratulations Are in Order)

It also doesn't help that states have been divesting themselves from ESG as well. In March of 2023, Florida Governor Ron DeSantis led a multi-state withdrawal from ESG funds, delivering a huge blow to the entire operation. 

So are we seeing the end of ESG? Likely, yes, and it's death can't come soon enough. 

ESG is effectively akin to a social credit score for companies, inspired by Chinese communism. Through ESG, many corporations have ruined their relationships with their customers as they embraced radical socio-political positions in an attempt to normalize fringe leftism. 

Corporations have embraced "Diversity, Equity, and Inclusion" policies that not only push out a company's core customers as the primary focus of the product but also require the company to distance itself from things like merit and skill in order to focus on checking identity boxes. 

(READ: If You Want to Collapse a Civilization, Just Institute DEI Initiatives)

While we might be seeing the decline of ESG, its influence is far from gone in our society and we'll likely endure quite a bit more of its destructive nature before it implodes in on itself. There's also no guarantee that it won't just be replaced with some other form of corporate social credit system. 

However, as the public, you ultimately control what businesses do and don't do through your wallet and voting habits. ESG was looking like an unassailable fortress for a time but now it's crumbling thanks to growing awareness and rejection of its policies and products as well as state divestiture. 

I'm not confident that corporations will learn this lesson the first time around, choosing instead to rebrand and try again in a different way. The key is to be aware of it.