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Region: The Americas

Biden regulatory moves will make ESG the ‘ultimate investment megatrend’

deVere Group makes the statement against the backdrop of the President appointing Gary Gensler as head of the Securities and Exchange Commission (SEC), the U.S. financial regulator


WASHINGTON DC, February 2 2021US President Joe Biden’s expected regulatory changes will push environmental, social and governance (ESG) investing “to become the ultimate megatrend”, said Nigel Green, CEO and Founder, deVere Group.

The independent financial advisory and fintech firm, which has USD 12 billion under advisement, made the statement, quoting its CEO, against the backdrop of President Biden picking Gary Gensler to head the Securities and Exchange Commission (SEC), the U.S. financial regulator.

Green said: “Joe Biden’s administration is going to usher in an era of serious momentum for responsible and sustainable investing. This is not just because of the likely tougher approach to the use of fossil fuels and his campaign’s vow to take swift action to tackle the climate emergency. It is also because of the expected appointment of Gary Gensler to lead the SEC, who is likely to heavily reform and broaden ESG investing and corporate disclosure rules in the U.S. In doing such, we can assume that Gensler would have the major support on the Commission.”

For instance, upon her appointment as Acting SEC Chair, Allison Herren Lee said that during her time as a Commissioner, “I have focused on climate and sustainability, and those issues will continue to be a priority for me.” In The New York Times, she wrote: “Both investors and the broader public need clear information about how businesses are contributing to greenhouse gas emissions, and how they are managing — or not managing — climate risks internally. Realistically, that can happen only through mandatory public disclosure.”

Green said: “Should the SEC push ahead with beefing-up green investment rules, as is expected, it will close the transatlantic gap that has emerged in recent years as the European watchdogs pushed ahead with increased stricter ESG investing and disclosure regulations.

“At the beginning of 2020, I described ESG investing as a ‘megatrend’ of the decade.  And throughout the year inflow doubled and ESG funds outperformed the market. But the tag ‘megatrend’ would now seem somewhat underplayed if the U.S. moves towards ESG-related regulatory reforms and comes into line with Europe. Responsible investing will become the ultimate investment megatrend should this happen.”

According to the firm, in a move to encourage clients to consider the ESG opportunities, it announced in January that it is planning to offer free, independent advice on socially responsible investing, with the aim of positioning USD 1 billion in environmental, social and governance (ESG) investments within five years. The company said:“The likely rule changes in the U.S. on ESG investing and corporate disclosures are not as yet heavily priced-in to markets. Investors should keep a keen eye on this area and move to take advantage of the opportunities.”

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