ESG’s Future on “Trump” Course

Credits: The Week

The possibility of a Donald Trump re-election may influence the fate of sustainable investments. While the US has made significant strides in renewable energy under the Biden administration, with the country ranking as the world’s second-largest producer of solar and wind energy, there are concerns about the future trajectory of such investments under a different leadership.

Under President Biden, the US saw substantial growth in solar production capacity, with a record 33 GW added last year alone.

This growth is expected to slow in 2024 due to economic challenges. Still, the Biden administration’s focus on clean energy was evident in initiatives like the Chips and Science Act, which aimed to invest nearly $53 billion in US semiconductor manufacturing to support clean energy, quantum computing, and artificial intelligence.

Trump (Credits: CNBC)

However, should Trump be re-elected, there could be a different approach to environmental policies. Rahul Bhushan from ARK Europe suggests that there may be limited risk to key legislation like the Inflation Reduction Act (IRA) and the Chips Act under a new Trump presidency.

These Acts were crucial for the green transition in the US, and their potential alteration or repeal could impact the trajectory of sustainable investments.

Bhushan believes there could be a continuation of the “green transition status quo” under a Trump presidency, suggesting that the momentum towards renewable energy and sustainability may not be as disrupted as some fear.

However, the specifics of Trump’s environmental policies and their impact on sustainable investments remain uncertain, as they would depend on various factors and policy decisions made by a potential second Trump administration.