Reuters: Despite the polarized US political climate, there has been progress in recent ESG developments

There is evidence of progress being made with regards to ESG matters, despite the obstacles presented by political polarization. Despite some political circles being against ESG, recent advancements suggest a positive trend in the United States.

The Inflation Reduction Act (IRA) has been a catalyst for sustainable finance, with $369 billion in energy security and climate change incentive programs over the next 10 years.

This has led to substantial private sector investment, including in clean energy manufacturing and the electric vehicle supply chain.

California is also set to require large companies to report their carbon footprints ahead of federal government plans.

However, corporate climate disclosure rules from the Securities and Exchange Commission (SEC) are critical to continue the trend of investment in sustainability.

The European Union’s Corporate Sustainability Reporting Directive (CSRD) also requires large and listed companies to report on social and environmental risks, with Scope 3 reporting, which could put US companies at a disadvantage if excluded from the SEC’s final rules.

Learn more: Reuters