Biden policies will make ESG investing the "ultimate megatrend"

Money manager says that serious momentum for ESG investing is incoming

Biden policies will make ESG investing the "ultimate megatrend"
Steve Randall

There are many priorities for Joe Biden with a pandemic raging and the economic risk remaining elevated.

But beyond the immediate action required, the new president’s administration is expected to have an impact on how America does business – and the financial markets.

Just weeks after an inauguration filled with hope and renewed commitments to the environment, one global financial advisor is anticipating a positive impact on ESG investing.

Nigel Green, CEO and founder of the deVere Group, which has $12bn+ under advisement, says that the expected appointment of former investment banker and professor Gary Gensler to lead the SEC means likely reform to corporate disclosure and investment rules.

“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,” said Green.

He added that, if the US and Europe become more closely aligned with ESG at its heart, then “responsible investing will become the ultimate investment megatrend.”

This is not just the intention of Gensler, with acting SEC chair Allison Herren Lee writing of her commitments in the New York Times.

“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,” she wrote.

Not priced in

Green says that the potential regulatory changes have yet to be heavily priced-in to markets.

“Investors should keep a keen eye on this area and move to take advantage of the opportunities,” he concluded.