In a move to bring clarity to proposed changes in the US around policy and regulation issues, the PRI has released a briefing document for both US and global signatories.
Since President Trump took office in January this year and began to assemble his administration, the political tide has turned in favour of looser securities regulation, a weaker commitment to climate change and environmental legislation and a more protectionist trade policy.
This is borne out by the number of new proposals have crossed desks at the SEC, Department of Labor, and the U.S. Treasury, which have the potential to impact financial and environmental legislation, including the ability of shareholders to bring proposals to annual general meetings and a loosening of climate change policies.
Responding to these concerns, the PRI has prepared this regulation update, outlining and summarizing for investors some of these proposed changes and their potential impact. Many U.S. asset managers and owners have embraced, embedded and endorsed ESG incorporation across the marketplace as a critical pillar in the achievement of long-term value creation. And the message that companies are rewarded for ESG-focused business practices through higher returns by investors as well as stronger brand loyalty by consumers, work ethic by employees, relationships with vendors, and support from local communities is increasingly being heard across the U.S. and other countries.
While the PRI does not expect federal policymaking to have significant negative implications on the level of interest and business case for responsible investment—thanks to growing
investor support around ESG issues and the strength of policies at the state level—we are concerned about any winding back of shareholder rights in the U.S., and the message that withdrawing from the Paris Agreement would send to other countries.
“Given the uncertainty around new regulatory and policy proposals in the US, it is vital that investors keep engaging policymakers on these issues,” said PRI managing director Fiona Reynolds. “As we know, governments come and go but issues such as climate change are here to stay.”