Former President Donald Trump secured a second term this week, defeating Vice President Kamala Harris in a highly divisive election focused on issues such as abortion, foreign policy, and the economy. With Trump’s return to the White House, the GOP’s control of the Senate, and a conservative-leaning Supreme Court, experts are sounding alarms on potential shifts in climate and ESG (Environmental, Social, and Governance) regulation.
Many speculate that Trump’s administration may target federal rules advanced under the Biden administration, including the SEC’s climate-risk disclosure rule, which mandates that companies disclose significant climate risks impacting their operations. This rule has already faced legal challenges, particularly from Republican-led states and energy groups, and experts anticipate further pushback on climate and ESG regulations under Trump.
The SEC’s broader ESG agenda, which includes measures on greenwashing, human capital, and corporate diversity, could also face scrutiny. These regulations remain in rulemaking stages and may be at risk, especially as President-elect Trump prepares for office in January. American University’s Julie Anderson suggests the SEC may feel political pressure to “back away” from climate regulations.
Beyond the SEC, the Department of Labor’s ESG rule for pension funds, which currently allows fund managers to consider ESG factors as a tiebreaker in investment decisions, may also be challenged. Legal experts say a Trump administration could revert to prioritizing “pecuniary factors” in investment decisions.
Further, analysis from Carbon Brief projects that Trump’s policies could lead to an extra 4 billion tons of CO₂ emissions by 2030, missing the U.S. target of reducing emissions by 50-52% below 2005 levels.
As regulatory changes loom, the future of U.S. climate action under a second Trump term appears uncertain, with substantial implications for sustainable investment, environmental protection, and global climate commitments.
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