Climate Change and ESG for the win: Elections 2020

The US election fallout seems to signalize a new, considerably promising era for climate change and sustainability as Joe Biden, US President-elect vowed not only to rejoin Paris agreement, after Donald Trump’s withdrawal back in 2017 but also to put in place one of the most remarkable yet bold enough climate plans in presidential history.

The feat of limiting global warming to 1.5˚C is not a bed of roses as the ambitious policy has to ensure that greenhouse gas emissions will reach net-zero by 2050.  About $1.7 trillion are announced to be invested in clean energy with the aim to create more green jobs while ending fossil fuel subsidies, make zero-carbon technologies and embark on new oil and gas permits on public lands shaping the future of renewable energy towards a responsible and revolutionary direction in favor of the planet and human kind.

How is ESG investing affected?

Moreover, it is expected ESG investing to also witness a progressive upshot. Investors who share high interest will have the opportunity to further invest and develop ESG strategies, although the ignorance of the past years on behalf of the government, had already forced them to pour significant amounts in order to generate positive impact on environmental, social, and governance (ESG) matters.

According to Morningstar’s flows report on global sustainable funds so far it has been reported a 60 million rise this year compared to the assets in US sustainable funds in 2019. This trend was accelerated in combination with the Covid-19 pandemic.  Nonetheless, there are a lot of high hopes from investors during the upcoming years under Biden administration, with mainly policy changes on selected potential areas that will evolve ESG and impact investing. It is highlighted by Bendell CEO at Toniic, that if ESG Investing is anywhere set to boost, funds must include transparency and create reliable disclosure which will make “the markets more efficient and better”.

Impact investors support transparency around corporate and environmental social practices. Currently, one of the most mainstream approaches towards the financial disclosure on ESG practices is supported by the Sustainable Accounting Standards Board (SASB). According to Bendell, SASB’s recommendation shouldn’t be a “terribly radical position,” for either Republicans or Democrats.

Corporations from the private and public sector are willing to cooperate with Biden administration to enact reform. With collective efforts to manage standardization around ESG issues it is expected to advance the field.

One of the best actions a company can take is educating and training on sustainability and ESG issues, how to identify and assess stakeholders, then prioritize material issues.  The training is the first step in an iterative process.  The Center for Sustainability & Excellence (CSE) and its online training platform of Sustainability Academy are committed to provide the latest and most updated knowledge on the field. Additionally, CSE is currently the only training organization in North America offering training material provided by SASB. On that note, check the newest addition to our online courses, the Online Certificate on SASB & TCFD Report as well as the Online Certificate on ESG Performance for Professionals and Investors and benefit from special discounts.

 

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