01/03/2021 – Sustainability / Environment / Social / Governance / Investment / US

Biden's America: From blue ripple to green wave

Biden’s victory in the United States heralds a new boom time for ESG investing – here’s why.

Joe Biden’s administration will usher in an unprecedented boom for Environmental, Social and Governance (ESG) investments, affirms the CEO of one of the world’s largest independent financial advisory organisations.

The bullish observation from Nigel Green, founder of deVere Group, comes after the veteran Democrat became the 46th President of the USA, after beating incumbent Donald Trump in a down-to-the-wire presidential election.

Dramatic rise in responsible investment

“At the start of 2020, I noted that ESG investing would reshape the investment landscape in this new decade, becoming one of the megatrends,” Mr Green observed. “There’s been a massive surge around the world from clients this year looking for such investments.”

Indeed, a deVere survey earlier this year revealed that more than a quarter of all clients are currently considering or are already actively engaged in responsible, impactful and sustainable investing. But this phenomenon is set to be dramatically accelerated with Joe Biden in the White House, predicts deVere Group’s boss.

Reversing Trump policies

“Joe Biden’s administration will usher in an unprecedented boom for Environmental, Social and Governance (ESG) investments for two key reasons,” he tells us. “First, the new US President – the CEO of the world’s largest economy – and his Vice-President Kamala Harris, actively championed on the election trail and before, values that have an inherent synergy with ESG-orientated investments.

“They campaigned on issues including climate change, social justice, equality, diversity, human rights and corporate transparency and accountability, he continues. 

“On many issues, particularly those relating to the environment, the Biden administration is aiming to reverse many policies established by Trump,” he advises. “For instance, Biden promised to bring the US back into the Paris Agreement, the multi-nation pact to combat climate change, on day one of taking office, and called for a transition in America from fossil fuels to renewable energy. Such campaign issues will now likely become policy,” he predicts. 

Realignment with Europe

Secondly, Mr Green remarks that it is “probable” that US rules surrounding ESG investing and corporate disclosures will now come into line with those of Europe – something Trump fiercely opposed.

“If the rules on ESG investing are matched and agreed upon, and an international standard and framework is brought in, we can expect further institutional investment piling into the ESG sector,” he forecasts. 

A Biden White House will bolster sustainable, impactful investing, which is a sector already outperforming the market this year, according to latest independent research.

Generational shift will drive ESG boom 

In addition, ESG is set to get a major boost due to demographic shifts.

“The biggest-ever generational transfer of wealth – likely to be around US$60 trillion – from baby boomers to Millennials (who are statistically more likely to seek responsible investment options), is to take place in the next couple of years. As such, ESG investing is set to grow exponentially in the 2020s,” observes Mr Green.

The deVere CEO concludes: “Biden has bold plans that perfectly square with ESG investments – an already burgeoning market. We can expect the boom to intensify further.”

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