Analysis: Sustainable investing advocates hope for friendlier U.S. rules if Biden wins

DiNapoli by Jessica and Kerber Ross

NEW YORK / BOSTON (Reuters)-Democratic challenger Joe Biden is looking for winning the Trump administration rules on Tuesday and finishing things soon, stifling his capacity to pick up stock using environmental , social or governance considerations, and fighting revived battles with business interests to support reform.

The Biden Win could boost US growth of environmental , social and governance (ESG), which is far beyond Europe, as the officials named by Trump have established financial regulations aimed at shareholder voting, or pension fund distributions. more than a decade lobbyists, investors and policy experts claim that it might boost US investment.

ESG investments are attracting more cash from customers, helped by studies with stronger outcomes.

However, according to Morningstar, Trump's Securities & Exchange (SEC) and Job Department regulations have made the US in dispute with major investors and farther behind European funds, which accounted for 82 per cent, over the third quarter of 2020, of the overall ESG assets of $1.26 trillion.

The finances of the United States kept 14%.

Democrats embrace ESG investment policies as a method of pressuring businesses to combat climate change, the disparity of income and social justice concerns.

Investors want Biden to emphasize the ambitious changes as he takes over the White House.

Dennis Kelleher, President of the independent think tank Better Markets, said "The Trump administration and its regulators have been politically anti-ESG, environment from the outset.

The government would emphasize climate change and therefore improve ESG divulgation and promotion. "This would change dramatically if Bidden wins.

The SEC implemented new prohibitions in July on proxy consulting businesses that prescribe the way investors vote in corporate elections.

Critics of those companies have claimed that they have built up so much influence and that they have to reel down the electoral phase.

In September, the SEC increased the criteria for shareholder control of securities, which rendered it more complicated for advocates to bring forward their motions on corporate votes.

The Department has indicated that the regulations must be revised.

The Labor Department finalized on Friday a regulation restricting certain investment managers to invest in companies based on social or environmental considerations, unless they could demonstrate an economic justification.

There is a related proxy law pending.

Thousands of dollars of pension account was contained in the proposals.

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Last month the American Chamber of Commerce, the nation's largest corporate organization, revealed in a memo that the rules demonstrated their push for reforms that favor shareholders though oppose "bearing fruit" to particular interest activists.

However, the reforms were blasted by investors and trade unions.

"Together, it restricts the willingness of consumers to keep corporations responsible," said the New York State Comptroller's corporate governance agent, Kyle Seeley.

If the Republicans hold the Senate majority, Biden could pick up new heads of the department that will amend the Regulations or enact countervailing steps, said the policy experts. If Democrats are to take the U.S. Senate, they will be willing to avoid utilizing laws which will enable a new Congress to overthrust the laws.

One of these new regulations, which Democratic SEC commissioner Allison Lee has introduced, will force businesses to create ESG reports and publications. If he wins Biden, Lee would be the acting chairman of SEC if he rejects the SEC amendments.

Mindy Lubber, Chief Executive Officer of the Ceres sustainability advocacy organisation, said that her group had spoken with the campaign Biden about implementing such disclosures, as well as legislation that enable banks to stress the balance sheets of their climatic risk assessment.

The initiative by Lee and Biden did not respond immediately to a comment message.


After the recession of 2009, leading investors have concentrated further on management pay and environmental concerns. The oil giants, including ExxonMobil Corp and Chevron Corp, have been stirring an outcry to justify their companies' damage to climate change.

For years, energy producers in other markets and in the S&P 500 have been underperforming.

Oil majors and other deep-seated organizations, such as the Chamber and the national manufacturers' association (NAM), have been pressing SEC rules in Washington for many years, according to three knowledgeable regulatory experts, many lobbyists and the public documents and letters.

For instance, the Chamber and NAM released a six-figure ad and social media lightning, alleging that the SEC started to discuss rule changes in 2018, saying Proxy Advisers hurt retired citizens and offered policy-related guidance, refusing certain firms.

According to three other sources and official correspondence, the Chamber has advised the Labor Department to implement reforms.

The Chevron spokesman said that restrictions on shareholder resolutions are "justified," and that the business strives to be open and sensitive to ESG concerns. Exxon refused to comment.

There were no statements from the Labour Department.

An SEC spokesman pointed out that its regulations improve accountability and "confidence and disclosure obligations to shareholders" without substantially changing their right to access proxy consultation or to get suggestions at the polls.

SEC and Labor Laws have strengthened the integrity of the investment procedure and secure employees' pensions from political whims of creditors, as the Chamber and manufacturers association have said.

For these purposes, Tom Quaadman, an Executive in the House of Representatives, claimed that the laws are with the Republicans and the Democrats alike.

"If questioned," says Charles Crain, NAM Director, "we would be prepared to uphold the law.

Simon Jessop, Trevor Hunnicutt and Katanga Johnson (Editorial by Michelle Price, Future report; David Gregorio editorial)