Potential Effects on Impact Investing Under the Biden Administration

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a potted trimmed tree with an arrow indicating increased and varied growthEnvironmental and sustainable investing has gained a lot of traction over the last 10 years, from wind power to water stocks, solar energy and more. As a result, more and more sustainable investment options are available for investors looking to make a positive impact with their assets. Many investors and financial professionals speculate that, under a Biden administration, this type of investing will only grow. If you’re interested in environmental investing, now might be the ideal time for you to start.  

Plans for a Green Economy

President-elect Joe Biden has announced a $2 trillion plan to deploy resources during his first term to take significant steps toward climate progress, according to his website. This is expected to benefit many areas such as solar and wind technologies, geothermal production, bioenergy production, energy storage, green transportation, green building and more. His plan includes, but is not limited to:

  • Having electricity production be carbon-free by 2035
  • Upgrading public transportation by providing high-quality, zero-emissions public transportation options
  • Investment in electric vehicle charging
  • Reduce the premium of electric vehicles over gas-powered cars
  • Implement cost reductions in innovative clean energy technologies

Green Technology and the Future of Investing

Federally funded research from a number of agencies including the Departments of Defense and Energy, NASA, the National Oceanic and Atmospheric Administration and the Environmental Protection Agency could be an economic driver for innovation over the next four years. In the past, for example, research led to innovative technology inventions such as the internet, GPS and smartphones. Investors are speculating that we may see new federal investments in science and technology that could rival the leaps we’ve had in the past.

Rejoining the Paris Climate Accord is predicted to further development in the U.S.’s clean energy industry. If tariffs on solar parts made in China and Mexico are lifted, the solar energy industry could also thrive. As isolationism is lifted, free trade can increase opportunities in emerging markets for U.S. companies.

Investments in sustainable investing in the U.S. has grown sharply, jumping to $17.1 trillion at the beginning of 2020, up from $12 trillion two years ago. This represents about a third of investment assets under management in the U.S. If the incoming administration is successful with these green initiatives, it is thought this trend will continue.

To learn more about investing, please contact our team of wealth management and financial planning experts.

Investment advisory services offered through Sikich Financial, an SEC registered investment advisor.

References

Nextbillion.net, “Reversal of Fortune: Five Ways Biden’s Win Will Boost Impact Investing in Emerging Markets,” 11/17/2020.

Penta, Barrons.com, “How a Biden Administration Will Boost ESG and Impact Investing,” 9/9/2020.

Barrons, “The Biden Era Could Be a Boon to Sustainable Investing,” 11/23/20.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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