Donald Trump’s imminent return to the White House, with a vow to support the fossil fuel industry, could strengthen the hand of those leading a backlash against sustainable investment. But observers in the sector insist it is not “game over”, as funds continue to flow into renewable energy and green technology assets.
It is easy to see how investors aligned with long-term environmental, social and governance ideals can find it hard to hold that faith in an increasingly polarised political debate. In the US, dozens of anti-ESG laws have been enacted in Republican states, according to law firm Ropes & Gray.
The proponents of these laws have successfully argued that fund managers taking a sustainable approach have caused their investors to lose out. For example, they say that excluding fossil fuel assets from funds prevented investors from benefiting from the steep rises in the price of oil and gas that followed Russia’s invasion of Ukraine.