What do Trump-era rollbacks mean for ESG investing?
The Department of Labor has just completed its 60-day public comment period to reverse two separate rules enacted under the Trump administration that made sustainable investing impossible for retirement plan issuers, E&E News reported.
The old rules put in place by the Trump administration have placed a great deal of regulatory scrutiny on advisors and financial institutions who have chosen to base their investments on climate change concerns by forcing evidence that IT G Funds invested in would not detract from client profits. The other rule required financial institutions to provide any assistance from IT G Proposals from shareholders.
The rollbacks are receiving increasing support not only from environmentalists, but also from the financial industry in general and some of the largest financial institutions. The new language takes the opposite stance, as all retirement plan issuers can not only support climate protection initiatives, but should also support such initiatives.
“The Labor Department’s proposed rule corrects the misconception that trustees are at risk if they contain them [environmental, social or governance] Factors in the financial evaluation of planned investments – treatment IT G same factors as any other economic factor, ”said Susan Olson, general counsel at Investment Company Institute, a trading group with members including BlackRock, Vanguard and JPMorgan Chase.
Long-term climate change advocates believe that judgments need to go further and have the active participation of all emitters, not just retirement, within the IT G Arena, but right now they believe this is a step in the right direction.
Participation in retirement plans IT G Investments could bring a flood of new funding to the market. For investors looking for a way to invest broadly in the S&P 500, but who are more exclusive when it comes to fossil fuel exposure, just need to refer to them SPDR S&P 500 fossil fuel reserves for free ETF (SPYX ).
The fund tracks the S&P 500 Fossil Fuel Free Index, a benchmark for companies within the S&P 500 that are “fossil fuel free”, defined as companies that have no fossil fuel reserves (thermal coal reserves and coal reserve by-products, and oil or gas reserves).
It’s not the same as running out of oil. The fund still has smaller allocations to fossil fuel companies including Valero (VLO) and Halliburton (HAL). However, without exposure to companies that actually hold the physical oil, coal or gas reserves, the fund’s energy allocation is greatly reduced. Energy makes up just 0.69% of the ETF’s sector compared to 2.66% of the SPDR S&P 500 ETF Trust (SPY ).
SPYX has an expense ratio of 0.20%.
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