It has taken a long time – too long perhaps for some – but the US is finally getting up to speed with all things environmental, social and governance (ESG). In fact it could be argued that developments in play at the moment could put the country at the forefront of ESG globally.
All of a sudden, it seems, a wave of activity has started to break, involving the top tier of regulators and policy making that includes the Securities and Exchange Commission, the Commodities Futures Trading Commission (CFTC), the Department of Labor and even the Federal Reserve. It’s not well known that the US was the first country in the world to issue guidance on corporate climate risk disclosure, way back in 2010.
So the roots of what we are seeing now go back a long way. The overarching context for the current activity is President Joe Biden’s sweeping plans to strengthen the country’s financial system against climate risk.
An Executive Order in May required the country’s financial regulators and public bodies to mobilise on climate risk and investment before the end of the year. It was a “monumental shift” says Fiona Reynolds, CEO of the United Nations-backed Principles for Responsible Investment (PRI).The US gets up to speed with ESG