Tom Eckett takes a closer look at whether President-Elect Trump's bark may be worse than his bite in terms of his impact on responsible investing sectors.
Concerns that Donald Trump's tenure as US President could hit the responsible investment industry are growing, following reports last week he is already planning to cut NASA's budget for monitoring climate change in favour of sending humans to the moon again.
While the President-elect has been vague in terms of his specific plans for energy companies and other sectors associated with responsible investing thus far, his views on issues such as climate change have been well documented over the years.
These included a tweet in 2012 stating the concept of climate change was "created" by the Chinese in order to make US manufacturing non-competitive, as well as making statements during the election campaign which cited plans to "cancel" the Paris Agreement and US Climate Action plans, stopping US support for UN global warming programmes, and advocating he wants to "save" the coal industry.
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According to the Responsible Investment Association, the slowdown of coal plant closures would result in less demand for renewable energy overall, while protectionist policies on Chinese production could raise the price of solar power, dealing a further blow to the industry.
Speed bump
Matt Christensen, global head of responsible investment at AXA Investment Managers, admitted that under Trump, the evolution of the responsible investing industry could hit a "speed bump", and would not do much to help the industry globally, while Tim Guinness, manager of the Global Energy fund at Guinness AM, added that "the overall pace of renewable energy expansion under President Trump will almost certainly be slower and negative for companies in the solar area and wind industries".
Trump's views on issues such as climate change are particularly worrying after eight years of pro-environmental reform by President Barack Obama, who helped spearhead major industry breakthroughs in responsible investing and climate change in particular, including the Paris Agreement, the Clean Power Plan, and the Climate Action Plan.
If Trump's actions match his rhetoric in this area - and with Congress now controlled by Republicans this is still likely - it will mean the US is no longer at the forefront of environmental regulation as it was under the Obama administration.
Long-term outlook
However, despite the negative sentiment surrounding prospects for responsible investing following the US election, some managers have so far dismissed Trump's comments and stated that longer term, the outlook for the sector remains positive.
They highlight that aside from some of his more controversial statements, the incoming president has also said he will commit to certain areas of responsible investing.
Eric Borremans, sustainability expert at Pictet Asset Management, said: "Although Trump's victory is more than just a blip and disruptive in the development and momentum behind the fight against climate change, it will not radically change the landscape and momentum we have seen building after the Paris Agreement.
