In the last several months, the ecosystem for ESG and impact investing has changed – dramatically. The new Trump administration has brought with it policy changes and regulatory rollbacks around everything from corporate ESG to energy investments to DEI.
And the change is happening fast: 18 states have already passed laws discouraging ESG, many companies, including financial firms, are dropping their DEI commitments, and big banks and investment groups are withdrawing from global climate commitments.
Taken together, it may feel like a bit of a gut punch for ESG and impact investors. “Trump has set a lot of pledges to roll back legislation, environmental incentives for electric vehicles and renewable energy, and programs for incentives around DEI,” says Stephanie Tsui, Chief Sustainability Officer at Genus. “All of these changes are presenting uncertainty to the ESG and impact investing landscape.”
But we don’t believe there’s any reason to despair. In fact, we’ve been here before, so we know that positive outcomes are not only possible, they’re highly likely. In 2017, for example, when Trump first took office, we saw impact investors increase their commitments to impact investing by 17%. And there’s a good chance that may happen again on a global level. “Last time Trump was in power, investments into the impact and ESG space actually went up quite a bit,” Tsui says.
Of course it’s still early to predict how markets and sectors will react to the latest slate of regulatory changes. But we see three big reasons to remain hopeful and focused in these changing times.
Sustainable investing is still needed – and growing
Despite setbacks, ESG investing is still thriving around the world. Although the U.S. has officially pulled out of the Paris Agreement, and many US-based investment firms are withdrawing from climate initiatives, sustainable investments are still finding support and building momentum. Europe continues to lead the way on climate-based impact investing, with 61% of businesses having already invested in it and 53% planning to do so. “Climate action transition investing is still very robust, and we really need it,” Tsui says.
According to a survey by Pensions for Purpose, over 90% of European investors polled said they were concerned over the state of ESG and sustainability practices in the US, but intended to maintain or increase their impact allocations. And 61% of organisations reported already having set, or were planning to set, specific targets for impact investments moving forward.
As the U.S. backs down on environmental initiatives, other countries may benefit from a shifting regional focus for investors, and that includes Canada. “Canada may be a beneficiary in all of this,” Tsui says. “The U.S. may actually find themselves in a more disadvantaged position in terms of the range of sustainable and impact investment options available, and more investments will start to go elsewhere – to Europe or Asia or even Canada.”
Sustainable investments continue to support sectoral priorities
While Trump has directed an expansion of the oil and gas sector to meet current energy needs, the U.S.’s strategic focus to become a global leader in AI will come with massive energy requirements – some of which may be fulfilled by alternate energy sources.
“Some of the renewable energies, such as wind and solar, have come to a point where they are quite competitive in terms of cost,” Tsui says. “And according to some statistics, investments in the renewable energy sector have actually surpassed investments in fossil fuels in the past years. Even major oil and gas players were urging the government not to roll back incentives or regulations, as they are looking at the long term,” Tsui added.
Tsui also points out that, before Trump’s inauguration, a lot of funding for the alternative energy sector had already been allocated, making a full repeal quite difficult.
Long-term values-led investors are staying the course
Most of the investors we work with take a long-term approach to their investments, and it’s something we highly recommend if you’ve got the runway. Meeting up with your investment advisor for an annual review will reveal whether your priorities have changed, and will give them the opportunity to make adjustments to your portfolio. But for most investors, taking a long-term view means staying the course.
It’s always helpful to revisit your investment philosophy and values to see if anything has changed for you. “I think we can expect that investors who are truly focusing on sustainability and impact, will further focus on their fundamental investment thesis, investment drivers and value alignment,” Tsui says. “If they truly care about values alignment, and they truly believe that responsible investments will be of benefit in the long run, they will continue to go for it.”
Of course it’s normal to be more cautious in times of uncertainty. But as our Executive Chair Person & Chief Investment Officer Wayne Wachell often says of sustainable investing: ‘this ship has sailed.’ Responsible investing has become a global movement that is greater than the force of the current U.S.-led shifts.
Today’s responsible and impact investors would do well to look elsewhere around the globe for sustainable and impact investment opportunities. “If you really care,” Tsui says, “look for companies that go above and beyond in terms of sustainable practices. The veil is peeling away on greenwashing and impact washing, and it may actually become easier to choose companies that actually do care.”
Interested in making a positive impact with your investments? Get started today with our values-based investment services.
References:
- Ellmen, E. (2025, January 7). Seven sustainable finance predictions for 2025. Corporate Knights. https://www.corporateknights.com/category-finance/seven-sustainable-finance-predictions-for-2025/
- Greggwirth. (2024, November 26). ESG in the post-election US: Regulation shifts to states & international regulators as federal policies wither – Thomson Reuters Institute. Thomson Reuters Institute. https://www.thomsonreuters.com/en-us/posts/esg/post-election-regulation/
Salman, Z. (2025, February 5). Why doubling down on purpose is the smartest move companies can make in 2025. The Globe and Mail. https://www.theglobeandmail.com/business/careers/leadership/article-why-doubling-down-on-purpose-is-the-smartest-move-companies-can-make/#:~:text=Doubling%20down%20on%20purpose%20isn,the%20communities%20that%20matter%20most.
- Fearing Trump, Wall Street sounds a retreat on diversity efforts. (n.d.). The New York Times. Retrieved February 13, 2025, from https://www.nytimes.com/2025/02/11/business/trump-dei-wall-street.html
DEI programs weathered a myriad of attacks this year, with more to come in 2025. (2025, January 3). NBC News. https://www.nbcnews.com/news/nbcblk/anti-dei-program-effort-2025-states-companies-universities-trump-rcna184580
Catenacci, T. (2024, February 15). JPMorgan Chase, BlackRock drop out of massive UN climate alliance in stunning move. Fox Business. https://www.foxbusiness.com/politics/jpmorgan-chase-drops-out-of-massive-un-climate-alliance-in-stunning-move
2017 Annual Impact Investor Survey. (n.d.). Global Impact Investing Network. Retrieved February 13, 2025, from https://s3.amazonaws.com/giin-web-assets/giin/assets/publication/research/giin-annualimpactinvestorsurvey-2017-web-final.pdf
- Eib. (2024, October 30). EIB Investment Survey 2024: More than 60% of European companies have invested in climate mitigation and adaptation and more than 70% in their digital transformation. European Investment Bank. https://www.eib.org/en/press/all/2024-386-eib-investment-survey-2024-more-than-60-of-european-companies-have-invested-in-climate-mitigation-and-adaptation-and-more-than-70-in-their-digital-transformation
Ianlewis. (2025, January 24). European investors upbeat on impact investing, despite US concerns. Impact Investor. https://impact-investor.com/european-investors-upbeat-on-impact-investing-despite-us-concerns/
Nath, T. I. (2024, November 22). The economics of solar power. Investopedia. https://www.investopedia.com/articles/investing/061115/economics-solar-power.asp
- Eaton, C., & Morenne, B. (2024, October 6). Big Oil Urges Trump Not to Gut Biden’s Climate Law. The Wall Street Journal. Retrieved February 13, 2025, from https://www.wsj.com/business/energy-oil/big-oil-urges-trump-not-to-gut-bidens-climate-law-795dc597
