Trump Quitting Climate Accord Could Boost ESG Assets
Interest in environmental, social and governance investing will only increase now that President Donald Trump has pulled the U.S. out of the Paris climate accord, ESG advisors tell InvestmentNews.
While he says the move is bad for the planet and the economy, sustainable investing will get a boost as a result because it “will matter more than ever before,” Andrei Cherny, CEO of ESG-focused advice firm Aspiration, tells the publication. With reduced government participation in encouraging environmental responsibility, investors will play a bigger role in pushing for more sustainable practices, Amy Crandall Kaser, a portfolio manager at Walden Asset Management, tells InvestmentNews.
As of 2016 $8.7 trillion was invested in ESG assets, according to data cited by the publication from US SIF, a forum for sustainable and responsible investment. That’s more than double the $3.7 trillion ESG assets comprised in 2012 and a more than tenfold increase from the $639 billion invested in 1995, according to a report from US SIF.
Demand for sustainable investing isn’t likely to drop because the momentum on climate change action is “unstoppable,” My-Linh Ngo, head of ESG investment risk at BlueBay Asset Management, tells the publication. If anything, with Trump out of the way, the Paris climate accord work will likely accelerate, Ngo says.
Under the accord, by 2025 the U.S. had agreed to reduce its greenhouse gas emissions by at least 26% below 2005 levels and pledged aid worth up to $3 billion to poorer nations by 2020, InvestmentNews writes. Untangling the U.S. from the agreement will take around four years, according to the publication.