Assessing The Impact of the 2024 US Presidential Election on the Future of Sustainable Investing
Author: Eden Hyman
The below article is one of a series of blogs based on a Policy Brief shortlisted as a finalist for the 2025 Chronos Sustainability Prizes
This policy brief was written in December 2024 in anticipation of the impacts of the US Presidential Election. The Election presented a critical juncture in the trajectory of sustainable investing, with many of the impacts being realised since the brief was written. This policy brief considered the Election outcome to hypothesise its potential implications on the pace and direction of sustainable investment.
Several findings emerged from this analysis:
Role and Extent of Federal Influence: The Federal government plays a critical role in determining the landscape for sustainable investing through international agreements, regulatory frameworks and direct investments.
Political Impact on Investor Behaviour: The policy brief identified a “Trump effect” whereby changes in federal leadership influence investor behaviour. This was considered to be most significant for short-term sustainable investments (which are often most reactive to political shifts and policy uncertainty), as long-term investments are often less reactive to political noise. By labelling ESG factors as part of a “woke agenda”, Trump’s politicisation and de-legitimisation of these factors could foster an environment of investor scepticism surrounding the financial viability of sustainable investing.
Emergence of Non-Federal Actors: The policy brief noted the potential for non-Federal actors including state governments, transnational networks and private-sector coalitions to emerge to fill the governance gap. The policy brief considered the examples of California and the “We Are Still In” Coalition as potential models for alternative governance mechanisms aside from Federal-level action. Despite their potential, the policy brief did acknowledge that these non-federal mechanisms often rely on voluntary commitments which lack enforceability.
Fragmented Regulatory Landscape: The uneven progress of State-level initiatives creates challenges for business operating across US States, particularly for large-scale sustainability projects. This regulatory fragmentation could limit the scalability and effectiveness of sustainable investment efforts.
The policy brief offered policy recommendations to safeguard and advance sustainable investment in reaction to anticipated federal inaction and regulatory overturns under a Trump administration:
Mobilise Bipartisan Support for Existing Climate Policies: The brief suggested that the Ceres network should further leverage its corporate climate commitments to lobby Republican support in protection of existing regulatory frameworks such as the Inflation Reduction Act.
Expand Interstate Standardisation of Climate Disclosure Requirements: The Ceres Business for Innovative Climate and Energy Policy (BICEP) network should continue to support State-level governance and efforts should be made to standardise climate disclosure requirements across states to provide a more consistent foundation for investors.
Strengthen and Monitor Private-Sector Coalitions: Building on the Ceres endorsement of the “We Are Still In” Coalition, Ceres should strengthen the coalition by targeting the most carbon-intensive businesses for membership and by implementing robust monitoring and reporting systems to encourage follow-through on members’ commitments.
Notes:
Eden Hyman’s policy brief titled ‘The Impact of the 2024 US Presidential Election on the Future of Sustainable Investing’ was the winner of the undergraduate Chronos Sustainability Prize 2024. A copy of the brief can be accessed here. Eden has completed her undergraduate BA Geography degree at LSE and is now moving on to complete the PGDL and SQE at the University of Law, before she starts her training contract with CMS.
Photo: by Clay Banks
