ESG investors and sustainable investing organizations have responded with significant optimism to the results of the US presidential election, viewing Joe Biden as an ally on sustainability issues, and after years of butting heads with the Trump administration.
Since last week’s election, Biden has been very vocal in support of returning the US to the climate change fight, and on investing heavily in sustainability initiatives. In one of his first statements following the vote, the President-elect vowed to return the country to the Paris Agreement on his first day in office. Earlier today, the Biden-Harris transition team identified climate action as one of the new administration’s four priority areas, outlining specific focus areas for investment, including renewable energy, sustainable infrastructure, buildings and housing, and clean transit and mobility.
Biden’s actions come in sharp contrast to those of the Trump administration, seen by most sustainable investment organizations as an obstacle to sustainability. Most notably, the outgoing President withdrew the country from the landmark Paris Agreement, making the US the only country of the 189 signatories to exit. The Trump administration also saw numerous rules and regulations introduced that worked counter to the objectives of sustainable investors, including a new rule passed by the Department of Labor (DOL) limiting the use of ESG investing in ERISA retirement plans, as well as a separate DOL proposal regarding proxy voting that may impact the ability of investment managers to promote sustainability goals through their investments, suggesting that proxy voting on ESG issues is not in the interests of investors. These rulings met significant resistance from major institutional investors and organizations.
Following the election results, several ESG investors and sustainable investing organizations have issued statements welcoming the new administration.
ESG Today spoke to Nidhi Chadda, Founder and CEO of Enzo Advisors, a boutique global advisory firm that helps companies build sustainable business models within an ESG construct. Chadda said:
“A Biden administration would only further accelerate the already exponential growth we have seen in ESG investing over the last several years. Although the US still lags its European counterparts in terms of mandated regulations as it pertains to ESG, I would expect the renewed emphasis on climate change to help drive a new focus on the regulatory environment, which would begin with the US re-joining the Paris Agreement.
“Furthermore, I would expect Biden’s climate change plan to spur additional innovation across the private markets as it pertains to clean technology and the circular economy. Beyond climate change, the Biden Administration would likely focus on continued efforts towards diversity and inclusion. Seeing the first woman and first woman of color get a seat at the table at the nation’s highest office breaks all barriers imaginable and marks a major milestone in the journey towards equality.”
Fiona Reynolds, CEO, Principles for Responsible Investment wrote:
“The PRI congratulates President-Elect Joe Biden and Vice President-elect Kamala Harris on their historic election win. We look forward with optimism to the new administration’s engagement on environmental, social and governance (ESG) issues, as an organisation focused on these issues – with governance a central theme of our work. Good governance mandates that every vote counts, and in the context of this election, we hope this principle is respected and that we see a peaceful and orderly transition of power to a new administration.
“Investors in the United States—and around the world—are now looking closely at the new Biden administration and its domestic and international policy directions. There is much to be done. The government and the private sector need to work together to tackle the pandemic, address climate change and to build back better with an economic recovery that includes developing a new social contract, creating green jobs and delivering economic prosperity for all.”
Reynolds continued to suggest key areas of focus for the new administration, including prioritising social issues including structural inequality, income disparity and racial inequality, taking action on climate change, and reversing Trump-era rollback of ESG integration.
“The Biden administration can begin to turn the tide.
“With a strong commitment from day one, and public counsel from the responsible investment community, including the PRI, supporting the new administration on domestic reform, international cooperation and global sustainability, there are real opportunities to make American finance great again.”
Mindy Lubber, Ceres CEO and President, said:
“Today’s election results are a win for our health, our planet, our economy, and our future. We now have a new President-elect and Vice President-elect that believe in science and facts, and that will bring bold new leadership and change. We look forward to the U.S. rejoining the Paris Climate Agreement and taking the necessary federal action to confront the global climate crisis. Climate change is the greatest human, environmental, economic and financial threat of our time — and today is a new day in tackling this threat.”
Amy Davidsen, Executive Director at the Climate Group, said:
“Concern for the climate played a major role in the 2020 presidential debates. President-elect Biden’s win shows that Americans expect their president to follow climate science and take the bold and necessary actions to get the US back on track as a leader.
As one of the world’s largest polluters, the US must take responsibility to make ambitious commitments to reduce greenhouse gas emissions by 2030 and get to net-zero no later than 2050. President-elect Biden has agreed to rejoin the Paris Agreement as swiftly as possible, a critical first step.
In the last four years, US businesses and state and local governments led the charge in driving the clean energy transition – seeing the value in renewable electricity, clean electric vehicles, and smart energy efficiency.
With supportive federal climate leadership, the transformation to a clean economy can go much faster. By all working together, we can create new jobs, improve our health and quality of life, and protect those most impacted by our changing climate, at home and abroad.”