Can Biden boost sustainable investments? ABGSC lists the key drivers

President-elect Joe Biden will enter office with an ambitious environmental agenda at a time when more and more investors are taking ESG seriously. 
The Trump administration has made a hands-off approach to environmental issues one of its trademarks, rolling back national emission regulations across major industries and withdrawing from the Paris Agreement.
But when Joe Biden enters the White House in January, he comes armed with a USD 2 trillion plan to completely decarbonise the US economy by 2050.
“This may prove to be a game-changer for the market for green energy solutions”, says John Olaisen, Co-head of Global Research at ABG Sundal Collier.
John Olaisen and Haakon Amundsen from ABGSC Equity Research renewable team lists the key facts that can contribute to a boom in sustainable investments once Joe Biden takes office:

• Rejoining the Paris Agreement. Biden has promised to re-enter the Paris Agreement as soon as he assumes office. That move alone may spur more growth in the clean energy industry.
• Increased risk in high-carbon assets. As the world’s largest economy embraces a fixed and ambitious timetable for decarbonisation, the long-term risk associated with fossil fuel-dependent investments may increase globally.
• Spurring renewable energy growth. Biden has vowed that the US will run on 100 per cent clean energy by 2035. To get there, he plans a massive and rapid build-up of renewable infrastructure, predominantly solar and wind power, to replace coal and natural gas plants. This will likely boost an already booming renewable sector. It is also interesting to note that the Biden administration’s clean energy plan also includes expanding nuclear power.
• Supercharging EV and battery industries. While Tesla has spearheaded the global transition to electric vehicles (EVs), the rest of the US auto industry has been reluctant to go all in on low- and zero-emission vehicles. Biden is poised to reintroduce stricter emission standards, while pledging billions of dollars of investment into EVs and battery technology. In addition to affecting the car and battery manufacturing markets, this may also increase the demand for EV infrastructure, such as charging stations.
• Increased demand for smart housing, infrastructure and cities. One of the elements of Biden’s environmental plan is to cut emissions by retrofitting buildings and infrastructure with emission-cutting technology . This may benefit companies capitalising on digital innovation to make infrastructure and buildings more efficient through smart technologies.

• Building demand for environmental consultancy services. Stricter environmental regulations overall create an impetus for companies to engage more proactively with sustainability strategies and environmental impact assessments. This in turn could result in an increased demand for high-quality environmental consultancy services.

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