A victory by Donald Trump in the November presidential elections would not do more harm to sustainable investment, as commented this morning by Matt Christensen, Global Director of Sustainable Investment and Impact at Allianz Global Investors. “The impact” [of the anti-sustainability] tide] “has already occurred; everything we are seeing is anticipating the victory of Trump.” Christensen has held a meeting with the media in Madrid to share the firm’s perspectives on ESG investment (which takes into account environmental, social, and corporate governance factors). In recent times, we have witnessed an anti-ESG trend coming from the United States. This anti-sustainability wave has its origins, largely, in the Republican states of the US that, with the push of oil companies, reject the exclusion of fossil fuels from investment portfolios (many sustainable investment funds have them banned). Visit the specialized portal elEconomista ESG.
“Currently, what we are seeing in the market is a hands-off attitude, of not wanting to touch the ESG issue, because it is too politicized; I don’t think we will see much difference if Trump is elected, because this is already here, it has already happened,” Christensen affirmed. He does not see the Inflation Reduction Act (IRA) in danger, a plan implemented by President Joe Biden that represents the largest investment to address climate change that the country has made. “I don’t think Trump is going to modify it [the IRA] much, because this plan has a lot of support from the states”, including Republicans. Christensen cited the example of Texas, a red state (Republican) that is receiving a lot of investment thanks to the IRA, “although everyone refers to this issue as Energy Security, not ESG“, he emphasized, pointing out that this is the acronym to avoid in the US. “Semantics is what counts,” he added. ‘Green’ large listed companies have almost triple the stock market potential of oil companies.
The Sustainable Investment Manager at Allianz GI explained that the anti-sustainability trend started in the US because this is a market “much more based on passive products.” Investors noticed that sustainable passive funds “were more expensive, and also did not present significant differences compared to other funds in terms of the companies they held in their portfolios,” he explained.
Regarding the volume of this universe of funds, in his opinion, it would be reasonable that by 2030, sustainable investment funds will have reached $13.7 trillion in assets under management (both liquid and private assets), which would account for 8% of total assets globally. This estimate is not from Allianz GI, but from UNCTAD (the UN Trade and Development arm). Achieving those $13.7 trillion would more than quintuple the 2022 figure, which, according to the same source, stood at $2.5 trillion.
