Sustainable investing will still shine during second Trump administration

Stephanie Cohn Rupp is chief executive of Veris Wealth Partners and the board chair of the US Sustainable Investment Forum
The market will continue to respond to real-world economics beyond Washington politics
At a glance
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Despite fierce political headwinds, we believe investors recognise the huge opportunity offered by the climate transition
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Individual investors and their advisers have made sustainable investing mainstream. Now, more family and community foundations are documenting investment policies aligned with their missions
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Despite some high-profile organisations publicly pulling back from DEI programmes, we believe investors who fail to invest with an eye towards diversity do so to their own detriment
Despite headlines to the contrary, we believe market forces and consumer interest continue to shine a bright light on the future of sustainable investing. And as the incoming board chair of the US Sustainable Investment Forum, I could not be more excited about what is ahead. I have kept my ear to the ground as our industry grapples with challenges and opportunities that may arise in a second Donald Trump administration and see significant opportunity.
The US SIF Foundation recorded $6.5tn, 12 per cent of the total US market, as specifically identified or marketed as sustainable or environmental, social and governance investment in its 2024 Trends Report. We believe sustainable investing has passed a tipping point and is here to stay. It is not a niche likely to fold in on itself.
Furthermore, history provides an encouraging perspective: during Trump’s first term, sustainable investments not only survived but thrived.
We believe the market will continue to respond to real-world economics beyond Washington politics. For investors focused on long-term value creation, we believe sustainable investments remain compelling despite — and perhaps because of — the changing political landscape.
Climate-smart investing is smart investing
Regardless of the political reality in Washington, sustainable investors have recognised the huge opportunity present in the climate transition. Sustainable investors believe investing in sustainable companies is less risky, since such businesses are better prepared for future uncertainty. In addition, they believe these investments directly help create the more sustainable world that we hope to create.
We believe investors can play a critical role in empowering the clean energy transition by investing in climate smart technology and using just transition principles — which account for and accommodate any potential displacement caused by adopting new energy technologies — in our investment decision-making process.
Last year, Veris shared a framework on investing in a just transition to a lower-carbon economy. Through the creation of this framework, we found there are abundant investible opportunities.
US foundations are aligning their assets with their missions
Individual investors and their advisers have made sustainable investing mainstream. Now, more family and community foundations are documenting investment policies that align with their missions, in service to their organisations’ goals and to better engage their donors and members.
As foundations seek to become mission aligned, they join institutional investors around the world in adopting disciplines to consider the impact of their investments on society and the environment.
In my view, these organisations are not abandoning their fiduciary duty to donors or giving up on seeking market rate returns, but instead looking to generate appropriate returns without abandoning their principles.
Continuing commitment to diverse viewpoints
While the Trump administration’s executive actions to eliminate diversity, equity and inclusion programmes in federal government and to discourage DEI in the private sector are disheartening, it is clear the private sector should continue these efforts.
Investing in companies and funds with diverse staff, investment committees, boards and more is a measurable success metric that we believe leads to better long-term results. Evidence suggests inclusive teams benefit from diverse perspectives in terms of better decision-making and better processes for identifying risks and opportunities. Studies have shown that companies with diverse leadership and boards perform better over time. This is most probably why JPMorgan chief executive Jamie Dimon remains steadfast about DEI efforts.
This is also a commonsense approach for the economy at large. We now know investing in diversity means creating more opportunity for all. Research suggests that closing the racial wealth gap in the US economy would boost consumption and investment within the economy by an additional $2tn to $3tn.
At Veris, we created a due diligence framework for gender lens and DEI investing to identify fund managers that are diverse and inclusive at all levels of the organisation; use an equity, diversity and inclusion lens in their investment process; are focused on intentional investments in under-resourced communities; and are working to dismantle obstacles to racial and gender equity through their policies, practices and investments.
Looking ahead
The momentum behind sustainable investing is real. There will continue to be investment opportunities in companies that recognise that environmental and social stewardship is not just good ethics — it is also good economics. We believe consumers and foundations, like many institutional investors, will continue to do well by doing good.
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