Guest post: Novata’s Co-Founder and Co-CEO, Josh Green, examines the issues driving the 2026 election…and what they reveal about ESG’s enduring relevance.
At Novata, we work with hundreds of investment firms and thousands of companies on sustainability and the risks formerly known as ESG. Over the last couple of years, we watched the acronym ESG take a beating. It was politicized, deprioritized, and declared dead in multiple think pieces. Plenty of firms quietly stopped using the term, even as they kept doing the work.
So it’s been interesting to watch the 2026 midterm cycle take shape, because the issues animating American voters right now are aligned with the three pillars of the framework everyone said was over: Environmental. Social. Governance.
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For most of the last decade, the environmental conversation in American politics was about 2050. Net-zero targets. Glacier retreat. Things that were real, important, and easy to deprioritize when something more urgent popped up. When the political winds shifted in 2025, adaptation became the buzzword of choice, as we wrestled with increasing frequency and ferocity of hurricanes, tornadoes, floods, and fires.
In 2026, the environmental conversation is simply about the price of gas.
When the U.S. launched Operation Epic Fury against Iran at the end of February, gasoline was averaging just under $3 a gallon. As of last week, the national average was $4.56, all 50 states are above $4, and seven states are above $5. The war-driven surge has been the dominant inflation story of the Spring.
An NPR/PBS News/Marist poll earlier this month found that 8 in 10 Americans say gas prices are straining their budgets, with overwhelming majorities of Democrats, independents, and Republicans finally all agreeing on something. The President has publicly floated a suspension of the federal gas tax. This isn’t a partisan story. It’s a kitchen-table story.
Previously, I described this as an unexpected policy intervention, one that effectively put a $100/ton price on carbon without any of the benefits of a real carbon price. But the political story is simpler — the price of gas is freaking out voters and politicians alike. And layered on top is widespread recognition that voracious energy demand from the AI data center buildout is pushing residential electricity rates up.
This is environmental politics. It just doesn’t sound like environmentalism. It sounds like affordability.
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The social pillar of ESG was always hard to measure, but voters seem to have figured it out. It’s measured in job losses for people who work (so far tens of thousands, but heading toward hundreds of thousands) and unprecedented riches flowing to a small number of people who control the newest technology (so far hundreds of billions of dollars, but heading toward trillions of dollars).
Two story lines are clearly converging. AI is automating routine cognitive labor across a wide variety of professions, eliminating jobs. And wealth concentration has reached levels not seen since the Gilded Age. Voters have figured out that this is not a coincidence. The result is a roiling debate about who is benefiting, and who should benefit, from the next wave of technology. Even Elon has weighed in, calling for “universal HIGH INCOME” [caps are his] as the answer to AI putting people out of work.
We’re having a debate about the social contract. We’re just calling it a debate about AI.
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In the corporate world, governance tends to be about issues like board composition, executive comp, and audit committees. In the United States, as we approach mid-term elections, governance means something more literal: how are we governed, and does our form of government still work?
Lately, this question shows up as a fight about gerrymandering. As the pundits point out, politicians are picking their voters, rather than the other way around. Why? Because the stakes of politics seem ever higher, and neither side trusts the other side to govern. The result is a gerrymandering arms race that no one will win, but that will almost certainly result in greater polarization.
Across the Atlantic last month, it showed up as a council election that defeated Keir Starmer’s Labour government and put Nigel Farage’s Reform Party on a credible path to Downing Street. Ross Douthat wrote a great piece on it for The New York Times, arguing that what we are seeing is not the rise of any specific ideology but the persistence of what he calls a “post-liberal” condition. In Douthat’s view, a structural crisis of Western governance is driven by aging populations, mass immigration, and social media producing “doomerism and paralysis and an insta-disillusionment with political leaders.”
American governance has calcified into a two-party system of extremes that is increasingly divorced from any moderate majority. British governance is fracturing because its old duopoly collapsed and nothing coherent has replaced it. In both cases, the underlying question is whether the democratic structures we inherited can still produce legitimate, functional government. And, more broadly, whether the conditions of modern life are even compatible with forms of government that are centuries old.
We’re not just arguing over who should govern. We are arguing about something more fundamental, the manner in which we’re governed. Call it “governance.”
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A reasonable reader might think I am stretching a framework to fit the news cycle. Surely politics is not all about ESG. Fair pushback, so let me be precise. I am not claiming every political fight is an ESG fight. I am saying that the specific fights animating this election — gas prices and energy affordability, AI displacement and wealth concentration, the integrity of democratic representation — map onto E, S, and G with surprising precision. The acronymic battle may be lost, but you’ve got to give it to the ESG framers… They correctly identified the risks that are material to businesses and, as it turns out, also to voters.
Like the moles in whac-a-mole, these risks are going to keep popping up. Not based on what happens in this next election, but because the world is changing quickly, and, in response, we have choices to make. Will we let the technologies that we have unleashed destroy our way of life, or will we harness them to build a brighter future for all?
ESG was never about saving the planet. It was about saving capitalism from itself.
