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Posted On: 11/12/2024 4:38:35 PM
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Jefferies Advises ESG Heads to Lawyer Up After Trump’s Win
Following Donald Trump’s win during the United States’ 2024 presidential election, managers of ESG funds are being advised to lawyer up. It is expected that Trump’s second term in the White House will see the Republican Party’s assault on ESG investing strategies increase significantly.
Analysts at Jefferies Financial Group Inc. advise that investors who intend to carry on with their ESG portfolios make sure that they understand all the ins and outs of the American legal system.
In a recent note to clients, Aniket Shah and other analysts encouraged all managers of ESG funds to have a lawyer on speed-dial or their teams. This will allow CEOs to consult on how best to navigate the new environment. Shah is the Global Head of ESG and Sustainable Finance Strategy at the company.
The note also emphasized that anti-trust risk was still high for asset managers in ESG, noting that no cases had been filed yet, which meant there was no legal precedent. Additionally, the note pointed out that legal risks concerning fiduciary duty would remain relevant as states implemented anti-ESG regulations.
Currently, the ESG industry is vulnerable to legal threats, in addition to obstructive policies and the threat of bans. Key members of the Republican Party have for a while now alleged that companies that embraced ESG were ignoring their fiduciary duties.
Additionally, GOP attorneys have claimed that financial companies which incorporate environmental, social, and governance metrics may be guilty of working against the fossil-fuel industry, helping increase inflation.
The Jefferies analysts believe that greenhushing may become more common with this new political landscape given that the GOP has taken control of the White House, the Senate and maybe soon, the House.
Greenhushing refers to the practice of not publicizing any information on ESG.
The analysts explained that retaliation to ESG initiatives via legal means could see more firms become pragmatic, focusing mainly on strategic discussions linked to their business model. They also believe that some firms may also be pushed to take stances on issues like diversity and inclusion, as well as abortion.
In addition, they note that the current situation may be made worse by states across the ESG divide championing for completely opposite policies.
It should be noted that these observations specifically apply to the ESG label, not the outlook for the clean energy transition.
In other news, Trump’s win has also affected stocks in green sectors. On November 6th, shares of wind-energy firms were some of the biggest losers.
While the stark warning issued by Jefferies could apply to investment funds, individual companies like Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) that simply integrate these principles within their operations have nothing to worry about regarding the anti-ESG stance of Trump and GOP politicians.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
Following Donald Trump’s win during the United States’ 2024 presidential election, managers of ESG funds are being advised to lawyer up. It is expected that Trump’s second term in the White House will see the Republican Party’s assault on ESG investing strategies increase significantly.
Analysts at Jefferies Financial Group Inc. advise that investors who intend to carry on with their ESG portfolios make sure that they understand all the ins and outs of the American legal system.
In a recent note to clients, Aniket Shah and other analysts encouraged all managers of ESG funds to have a lawyer on speed-dial or their teams. This will allow CEOs to consult on how best to navigate the new environment. Shah is the Global Head of ESG and Sustainable Finance Strategy at the company.
The note also emphasized that anti-trust risk was still high for asset managers in ESG, noting that no cases had been filed yet, which meant there was no legal precedent. Additionally, the note pointed out that legal risks concerning fiduciary duty would remain relevant as states implemented anti-ESG regulations.
Currently, the ESG industry is vulnerable to legal threats, in addition to obstructive policies and the threat of bans. Key members of the Republican Party have for a while now alleged that companies that embraced ESG were ignoring their fiduciary duties.
Additionally, GOP attorneys have claimed that financial companies which incorporate environmental, social, and governance metrics may be guilty of working against the fossil-fuel industry, helping increase inflation.
The Jefferies analysts believe that greenhushing may become more common with this new political landscape given that the GOP has taken control of the White House, the Senate and maybe soon, the House.
Greenhushing refers to the practice of not publicizing any information on ESG.
The analysts explained that retaliation to ESG initiatives via legal means could see more firms become pragmatic, focusing mainly on strategic discussions linked to their business model. They also believe that some firms may also be pushed to take stances on issues like diversity and inclusion, as well as abortion.
In addition, they note that the current situation may be made worse by states across the ESG divide championing for completely opposite policies.
It should be noted that these observations specifically apply to the ESG label, not the outlook for the clean energy transition.
In other news, Trump’s win has also affected stocks in green sectors. On November 6th, shares of wind-energy firms were some of the biggest losers.
While the stark warning issued by Jefferies could apply to investment funds, individual companies like Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) that simply integrate these principles within their operations have nothing to worry about regarding the anti-ESG stance of Trump and GOP politicians.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
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