Will ESG ETFs Flourish Under A Biden Presidency?

windmill on grass field during golden hour

The coronavirus pandemic has impacted the investing world, with market participants showing greater interest in conscious investing, spurring demand for environmental, social and governance (“ESG”) funds. According to the Forum for Sustainable and Responsible Investment’s 2020 trends report, total U.S.-domiciled sustainably invested assets under management, including institutional and retail, rose 42% to $17.1 trillion compared with $12 trillion between 2018 and 2020, per a CNBC article.

Furthermore, MSCI’s Linda-Eling Lee has said to CNBC’s “ETF Edge” that ESG-themed investments should stay in demand considering the growing interest in sustainable and socially-responsible investing following an “extraordinary year” in 2020, as mentioned in a CNBC article.

Going on, 2020 is being called the “tipping point” year for ESG investments considering the huge inflow into the space, per an Oilprice.com article. The same article states that the largest asset manager in the world, BlackRock, expects to have $1.2 trillion in ESG assets within the next 10 years. Going by the same write-up, President-elect Joe Biden, who is also being called the “green president,” will give a lot many reasons to investors for favoring the sustainable investment space. The space is expected to see favorable government initiatives, investments and federal policies under the Biden presidency.

In fact, a CNBC article states that some senior Biden officials are expecting another spending bill, primarily focused on climate change and infrastructure, among other initiatives to be introduced in February.

The alternative energy space is expected to get stronger under the Biden administration. Biden is expected to talk about the climate emergency on global platforms and ensure that the United States achieves a 100% clean energy economy and net-zero emissions, no later than 2050. Going on, Biden’s climate and environmental justice proposal will make a federal investment of $1.7 trillion over the next 10 years, leveraging further private sector and state and local investments to stand at more than $5 trillion.

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