The ESG tide is turning in the US
Freddie Woolfe, Analyst, Sustainable Investing highlighted developments around ESG regulation in the US. Last week, the Department of Labour said that it would not enforce Trump-era rules that would prevent workplace pension funds from considering ESG when selecting plan investments. This comes hot on the heels of the Securities and Exchange Commission announcing the creation of climate and ESG taskforce, which will seek to identify ‘greenwashing’ in company reporting. Freddie and the team particularly welcome this, as they have long been sceptical about a lot of corporate reporting on ESG.
These measures, along with the dozens of environmental regulations that are being considered for revision or repeal in the US – including re-joining the Paris Agreement – show that the Biden administration is moving quickly. The tide may now be turning in a country that has, in many respects, been behind the UK and EU in ESG adoption and sophistication.
Freddie also discussed the healthcare sector and other areas related to the Covid response. Exposure to such business helps investors align to the UN Sustainable Development Goal for ‘Good health and well-being’, but they have not been a beneficiary of the recent market rotation. Examples that the Sustainable Investing team have found attractive include vaccine producers, testing kit manufacturers, testing processors and providers of disinfecting and cleaning solutions for not only the life sciences sector but also hospitality.
Despite being temporarily out of fashion in the market, Freddie pointed out that the team’s favoured stocks in this area’s operational and financial performance and resilience over this period have been strong. Looking long-term, Freddie continues to see a significant role for these companies to play in keeping society safe and businesses open as the world learns to live with Covid. Jupiter recently signed the Access to Medicine Foundation’s statement, calling for an equitable approach to vaccine availability and affordability globally.
Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the individuals mentioned at the time of writing, are not necessarily those of Jupiter as a whole, and may be subject to change. This is particularly true during periods of rapidly changing market circumstances.