Joe Biden’s expected regulatory changes will be a key point in the rise of ESG investing. Of course, the rise and rise of ESG is neither new nor unexpected. But maybe Biden’s plans will accelerate that which was going to happen, anyway.
According to Nigel Green, chief executive and founder of deVere Group, which has $12bn under advisement, Biden’s pick of Ex Goldman Sachs man, Gary Gensler to head the Securities and Exchange Commission (SEC), the US financial regulator, is an important step.
Gensler is expected to be a big reformer, and to broaden ESG investing and corporate disclosure rules in the US.
Nigel Green said: “Joe Biden’s administration is going to usher in an era of serious momentum for responsible and sustainable investing.
“This is not just because of the likely tougher approach to the use of fossil fuels and his campaign’s vow to take swift action to tackle the climate emergency.
“It is also because of the expected appointment of Gary Gensler to lead the SEC, who is likely to heavily reform and broaden ESG investing and corporate disclosure rules in the US.
“In doing such, we can assume that Gensler would have the major support on the Commission.”
But Gensler isn’t the only SEC bigwig who cares about ESG.
Allison Herren Lee said that during her time as a Commissioner, “I have focused on climate and sustainability, and those issues will continue to be a priority for me.”
In The New York Times, she wrote that: “Both investors and the broader public need clear information about how businesses are contributing to greenhouse gas emissions, and how they are managing — or not managing — climate risks internally. Realistically, that can happen only through mandatory public disclosure.”
Nigel Green concluded: “Should the SEC push ahead with beefing-up green investment rules, as is expected, it will close the transatlantic gap that has emerged in recent years as the European watchdogs pushed ahead with increased stricter ESG investing and disclosure regulations.
“If the US. moves towards ESG-related regulatory reforms and comes into line with Europe.
“Responsible investing will become the ultimate investment megatrend should this happen.”