Sustainable investing advocates hope for friendlier US rules if Biden wins
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Friday
February 03, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
FRIDAY, FEBRUARY 03, 2023
Sustainable investing advocates hope for friendlier US rules if Biden wins

US Election 2020

Reuters
02 November, 2020, 08:00 pm
Last modified: 02 November, 2020, 08:18 pm

Related News

  • Biden's climate agenda has a problem: Not enough workers
  • China defends its Covid response after WHO, Biden concerns
  • Ukraine's Zelenskiy could visit Biden, US Congress on Wednesday
  • Biden blacklists China's YMTC, crackdowns on AI chip sector
  • At state visit, Biden and Macron face dispute over American subsidies

Sustainable investing advocates hope for friendlier US rules if Biden wins

ESG investing is winning more investor cash, boosted by studies showing superior performance

Reuters
02 November, 2020, 08:00 pm
Last modified: 02 November, 2020, 08:18 pm
Sustainable investing advocates hope for friendlier US rules if Biden wins

Progressive groups and investors hope Democratic presidential nominee Joe Biden can win on Tuesday and quickly end Trump administration rules that stifle their ability to pick stocks using environmental, social or governance factors, setting up a renewed fight with corporate groups that backed the changes.

More than a dozen lobbyists, investors and policy experts said a Biden win could boost US growth of environmental, social and governance (ESG) investing which lags far behind Europe, and which has been further stymied as Trump-appointed officials have crafted financial rules targeting shareholder voting and pension fund allocations.

ESG investing is winning more investor cash, boosted by studies showing superior performance.

But Trump's Securities and Exchange Commission (SEC) and Labor Department rules put the United States at odds with major investors and further behind European funds, which held 82% of the global total of $1.26 trillion of ESG assets in the third quarter of 2020, according to Morningstar. US funds held 14%.

Democrats favor so-called ESG investing strategies as a way to pressure companies to address climate change, wealth inequality and racial justice problems. If Biden takes the White House, investors expect him to prioritize aggressive reforms.

"The Trump administration and his regulators have been ideologically anti-ESG and climate from the start," said Dennis Kelleher, president of progressive think tank Better Markets.

"This will change significantly if Biden wins. His administration will prioritize addressing climate change and will also boost ESG disclosure and promotion."

In July, the SEC imposed new restrictions on proxy advisory firms that recommend how investors should vote in corporate elections. Critics of these firms said they had amassed too much power over the voting process and needed to be reined in.

In September, the SEC raised stock ownership requirements for submitting shareholder proposals, making it harder for advocates to get motions onto corporate ballots. The agency said the rules needed to be modernized.

On Friday, the Labor Department finalized a rule limiting some fund managers from investing in companies based on environmental or social factors, unless they could show an economic reason to do so. A similar rule on proxy voting is pending. The proposals cover trillions of dollars in retirement accounts. [nL1N2HL2DZ]

The US Chamber of Commerce, the country's most powerful business group, said in a memo last month that the rules showed its campaign for policies that benefit shareholders while opposing special interest activists was "bearing fruit."

But investors and labor unions have blasted the changes.

Together, they put "limits on investors' ability to hold companies accountable," said Kyle Seeley, corporate governance officer for pension funds overseen by the New York State Comptroller.

If Democrats win the US Senate, they could rescind the measures using a law that allows a new Congress to overturn freshly inked rules. If the Republicans retain their Senate majority, Biden could pick new agency heads who would revisit the rules or introduce countervailing measures, said policy experts.

Chief among those would be new rules requiring companies to issue ESG reports and disclosures, which Democratic SEC commissioner Allison Lee has argued for. Lee, who opposed the SEC changes, is likely to be SEC acting chair if Biden wins.

Mindy Lubber, chief executive of sustainability advocacy group Ceres, said her group has spoken with the Biden campaign about introducing such disclosures, as well as regulations requiring banks to stress-test their balance sheets for climate-related risks. She added that she expected corporate groups would fight any effort to rescind the SEC and Labor Department changes.

Lee and Biden's campaign did not immediately respond to a request for comment.

DEEP POCKETS

Since the 2009 financial crisis, top investors have focused more on executive compensation and environmental issues, sparking a backlash from oil majors including ExxonMobil Corp XOM.N and Chevron CorpCVX which faced investor pressure to explain how climate change could hurt their businesses.

Oil companies have for years underperformed other industrial sectors and the S&P 500.

The oil giants and other deep-pocketed groups, such as the Chamber and the National Association of Manufacturers (NAM), pushed hard in Washington for the SEC rules for several years, according to three regulatory sources with knowledge of the matter, several lobbyists, and public records and letters.

As the SEC began exploring the rule changes in 2018, for example, the Chamber and NAM launched a six-figure advertising and social media blitz saying proxy advisors harmed retirees and gave politically-motivated advice, claims those companies deny.

The Chamber also pushed the Labor Department to make changes, according to three other sources and public letters.

Exxon declined to comment. A Chevron spokesperson said limits on shareholder proposals are "justified" and that the company aims to be transparent and responsive on ESG issues.

The Labor Department did not comment.

An SEC spokesperson said its rules enhance transparency and the "fiduciary duties and disclosure obligations owed to shareholders" without materially changing their ability to access proxy advice or get proposals on the ballot.

The Chamber and manufacturers association said the SEC and Labor Department rules increase transparency around the investment process, and guard workers' pensions from the political whims of interest groups.

For those reasons, said Tom Quaadman, an executive at the Chamber, the rules resonate with both Republicans and Democrats. He said he expects some moderate Democrats to oppose an attempt to overhaul them.

"We will be prepared to defend the rules if they're challenged," said Charles Crain, a director at NAM.

World+Biz

US election 2020 / Biden

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • International Monetary Fund logo : AP via UNB
    IMF sets time-bound reform agenda as it releases first tranche of loan
  • Shipped Bhola gas to cost higher, yet cheaper than spot LNG
    Shipped Bhola gas to cost higher, yet cheaper than spot LNG
  • January exports rise nearly 6% riding on high-value RMG items
    January exports rise nearly 6% riding on high-value RMG items

MOST VIEWED

  • The supermarket deal, valued at around 6.8-billion pounds ($8.8-billion), follows an auction process for Asda over several months and returns the 71-year-old supermarket company back into British ownership after 21 years, a development welcomed by UK Chancellor Rishi Sunak. PHOTO: COLLECTED
    UK watchdog to rule on $9.5 billion Asda takeover by April 20
  • REUTERS/Carlos Barria
    Georgia prosecutors launch criminal probe into Trump efforts to influence election
  • Photo: Reuters
    Coca-Cola expects sales growth as vaccines set to allow venues to reopen
  • People line up to cast their ballots shortly after sunrise during early voting session in Celebration, Florida, US, October 25, 2020. REUTERS/Gregg Newton
    Stolen election? Republican lawmakers paralyzed by Trump's false fraud claims
  • Picture: Collected
    6 migrant workers dead after falling into pit in India's Meghalaya forest
  • FILE PHOTO: Razor wire is seen on a fence around the U.S. Capitol ahead of U.S. President-elect Joe Biden's inauguration, in Washington, U.S., January 17, 2021. REUTERS/Joshua Roberts
    Empty streets, thousands of troops in Washington as Biden becomes US president

Related News

  • Biden's climate agenda has a problem: Not enough workers
  • China defends its Covid response after WHO, Biden concerns
  • Ukraine's Zelenskiy could visit Biden, US Congress on Wednesday
  • Biden blacklists China's YMTC, crackdowns on AI chip sector
  • At state visit, Biden and Macron face dispute over American subsidies

Features

Six Jeep Wranglers and a special XJ Jeep Cherokee set out into the depths of Lalakhal, Sylhet for an experience of a lifetime. Photo: Ahbaar Mohammad

Jeep Life Bangladesh: A club for Jeep owners to harness the power of their vehicles

19h | Wheels
While the Padma bridge in operation is changing the lives of millions in the south for the better, passenger rush to Shimulia ghat died down. Photo: Masum Billah

How are the Shimulia ghat businesses faring after Padma bridge?

22h | Panorama
After so many investments going embarrassingly wrong, as was the case with Sam Bankman-Fried, perhaps tech investors’ preference for less experience will wane. Photo: Bloomberg

Are you the next Steve Jobs? Good luck raising money in 2023

21h | Panorama
An elderly couple's lonely battle to save Dhaka's trees

An elderly couple's lonely battle to save Dhaka's trees

1d | Panorama

More Videos from TBS

A proper price formula can help investors to plan big

A proper price formula can help investors to plan big

11h | TBS Round Table
Rumors about Sarika that everyone thinks are true

Rumors about Sarika that everyone thinks are true

10h | TBS Entertainment
Mugging rife in Tejgaon, murder in Wari

Mugging rife in Tejgaon, murder in Wari

12h | TBS Current Affairs
What secrets are hidden behind Adani's wealth?

What secrets are hidden behind Adani's wealth?

11h | TBS Stories

Most Read

1
Bapex calls candidates for job test 9 years after advert!
Bangladesh

Bapex calls candidates for job test 9 years after advert!

2
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

3
Photo: Collected
Energy

8 Ctg power plants out of production

4
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

5
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

6
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]