What would be the environmental and social impact of a Biden presidency?
We look at the key elements of the Biden climate agenda and its sectoral implications, as well as the social element of his campaign.
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As Americans prepare to head for the polls next Tuesday, the result of a hotly-contested presidential race hangs in the balance. However, there is a 65% chance that the next US president will be Democratic candidate Joe Biden.
The implications of a Biden victory for markets, the economy, the country’s handling of the pandemic, and international relations have been much discussed elsewhere. But as ESG (environmental, social and governance) investors, we’ve focused specifically on the implications for the “E” and “S” of our favourite acronym.
We found that they could be profound.
A sweeping Democrat victory in November would result in a step-change in US climate policy. Biden would re-commit the country to the Paris Agreement and to a net zero emissions reduction target by 2050.
This would mean significant investment ($2 trillion) into green industries and technologies, and it would also require tighter regulation of higher-emitting industries, including oil and gas, utilities and autos.
Beyond the climate agenda, a Biden victory could have significant implications for consumer, healthcare and tech companies as Biden seeks to strengthen labour protection, improve access and affordability in healthcare and regulate big tech.
Regardless of the election outcome, we expect an increased focus on on-shoring production and jobs to the US to benefit domestic companies and suppliers. This will have negative implications for international suppliers with high exposure to the US.
Our full research is available as a PDF below.
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.
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