With Donald Trump back in the White House and the rise of European right-wing parties, some have been concerned about whether sustainable investments will stagnate or die out altogether.
Concerns about this have only heightened with the Trump-appointed head of the EPA, Lee Zeldin, recently announcing plans to undo more than 30 anti-pollution regulations, with the goal of "driving a dagger through the heart of climate-change religion." However, despite the challenges sustainable investments are facing, asset managers are still optimistic about the future of sustainability and investment growth.
During Trump's first term, his administration stopped a number of actions on sustainability, such as withdrawing from the Paris Agreement and rolling back about 100 environmental protections. His administration also exhibited general skepticism toward science related to the planet's overheating.Â
The rollbacks removing or lessening penalties for pollution affected the global markets for ESG (Environmental, Social, and Governance) investments, so people have raised concerns about what will happen this time around.Â
So far, a month into his second term, Trump has taken aim at strengthening the fossil fuel industry in the United States with a declaration of a "national energy emergency." He claims doing this will cut energy costs in the U.S. by at least half.
As Funds Society reported, David Lee and Greg Meier from Allianz Global Investors stated, "His actions will complicate the fight against climate change."
However, though climate efforts and investments may slow in the United States, the global outlook for cleaner energy and investments should continue to grow as European countries and China pick up the slack.
With or without the U.S., the world is continuing on its path toward a cleaner future, and that cleaner future will continue to offer massive investment and growth for not only investors but America as a whole.
Investing in businesses focused on sustainability or those in the clean energy sector has proven time and time again to be financially wise, as these businesses outperform dirty energy companies when it comes to long-term growth. That means profit remains to be had in the clean energy and sustainability sectors for individual investors.
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Absolutely 💯 Despite talk of the ESG bubble popping because it proved to be designed around misguided strategies, data from 2023 showed these investment funds in Europe alone reached around €420 billion (about $458 billion USD). The long-term growth and momentum of the clean energy economy continue unabated.
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However, Funds Society reported the head of sustainable investment at Lombard Odier Private Bank recommended, "Investors will need to focus on sectors that are less exposed to policy risks and on those aligned with long-term demand for clean technologies, infrastructure, and climate resilience."
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