In this week’s edition of Economy and Society:
- Trump picks fossil fuel proponent for Department of Energy head
- SEC chairman announces resignation
- European Union spokesperson confirms plans to consolidate ESG reporting regulations
- EU adopts new ESG ratings regulation
- Adani Green Energy stock falls after founder charged with bribery
In Washington, D.C., and around the world
Trump picks fossil fuel proponent for Department of Energy head
What’s the story?
President-elect Donald Trump (R) announced Nov. 16 that he picked Chris Wright—who has previously said fossil fuel production helps drive economic growth and alleviate poverty—to head the Department of Energy.
Why does it matter?
Wright is another Trump pick opposed to the Biden administration’s environmental policies. His support for fossil fuels could signal ESG opposition from the incoming administration. Vivek Ramaswamy and Elon Musk—Department of Government Efficiency (DOGE) co-chairs—are also outspoken ESG opponents.
What’s the background?
Click here to read more from this newsletter about how the Trump administration might approach ESG policies.
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According to Reuters:
President-elect Donald Trump’s pick to lead the energy department believes fossil fuels are the key to ending world poverty which, he says, is a greater problem than climate change’s “distant” threat, according to a report he penned as CEO of oilfield services company Liberty Energy. …
In a corporate report released in February called ‘Bettering Human Lives,’ Chris Wright said that the energy transition has not begun and that climate change, while a challenge, is not the greatest threat to humans. …
Wright wrote, “the wealthy world has gone beyond over-optimism surrounding the breadth and scalability of a narrow slice of alternative energy and, unfortunately, has rushed head-long into outright obstruction of hydrocarbon infrastructure and production.”
SEC chairman announces resignation
What’s the story?
SEC Chairman Gary Gensler announced Nov. 21 that he will leave his position effective Jan. 20, 2025, at the end of Joe Biden’s (D) presidency. Trump will name his replacement.
Why does it matter?
Gensler promoted policies supportive of ESG investing as chairman, including a set of rules requiring climate-related corporate disclosures. Most commentators believe Trump’s replacement will likely oppose ESG and overturn corporate climate reporting requirements.
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According to Pensions & Investments:
President-elect Donald Trump is mulling a wide range of candidates to replace Gary Gensler as SEC chair, sources said.
The potential list of people to lead the securities regulator in a second Trump administration features professionals from both inside and outside the Washington Beltway, but sources predict any Trump nominee will have a much different governing style than Gensler, with less of a focus on climate risks and ESG and a more friendly approach to the cryptocurrency industry.
European Union spokesperson confirms plans to consolidate ESG reporting regulations
What’s the story?
A European Union (EU) spokesperson has officially confirmed that the next European Commission (scheduled to start Dec. 1) will seek to consolidate ESG reporting regulations into one comprehensive package.
Why does it matter?
EU Commission President Ursula von der Leyen has previously argued that an omnibus ESG regulation would make compliance easier for EU-based corporations.
What’s the background?
Last week’s newsletter covered speculation around the possible omnibus regulation package.
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According to Bloomberg:
The next European Commission will urgently seek to streamline the bloc’s many environmental, social and governance rules, as it responds to complaints that excessive regulations are gutting industry competitiveness.
Simplification will be at the center of the incoming commission’s work, a spokesperson for the European Union’s executive arm told Bloomberg. The plan is to deliver significant measures to reduce burdens, the person said. …
Companies and industry groups have accused the EU of adding unreasonable layers of regulations in its pursuit of environmentally and socially sustainable economic growth. In an effort to level the playing field, a number of companies have started moving some production to the US from Europe.
EU adopts new ESG ratings regulation
What’s the story?
The EU also adopted a new regulatory structure for ESG ratings providers. The rule authorizes the European Securities and Markets Authority (ESMA) to administer transparency standards and supervise ratings companies. It is scheduled to take effect in mid-2026.
Why does it matter?
The rule will require more disclosures and transparency regarding how ratings providers determine ESG scores for companies. Regulators say the standards will make ESG scores more reliable and easier to compare while preventing conflicts of interest.
What’s the background?
Lawmakers in the UK are considering draft legislation with similar provisions, which this newsletter covered last week.
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According to ESG News:
The Council of the European Union has approved a groundbreaking regulation to enhance the transparency, consistency, and comparability of environmental, social, and governance (ESG) ratings. This move aims to bolster investor confidence in sustainable financial products by addressing key concerns about the reliability of ESG assessments. …
The regulation will be published in the EU’s Official Journal and will take effect 20 days later. It is set to apply 18 months after its entry into force, giving stakeholders time to align with the new standards.
On Wall Street and in the private sector
Adani Green Energy stock falls after founder charged with bribery
What’s the story?
Adani Green Energy’s stock lost over a third of its value after the U.S. government charged its founder—Indian billionaire Gautam Adani—with bribery last week.
Why does it matter?
About 770 ESG funds worldwide held shares of Adani Green Energy. Some observers—such as investor Henry Kinnersley—argue Adani’s investors were too interested in the company’s environmental promises to see its governance issues.
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According to Bloomberg:
Roughly 770 ESG funds worldwide hold shares of Adani Green Energy Ltd., which just lost about a quarter of its value after US prosecutors charged Gautam Adani with suspected bribery. It’s one of a group of companies in the Adani empire that made it past ESG screens, only to be dumped by investors as they digest a fresh litany of alleged breaches.
“Adani Green’s terrible governance was in plain view,” said Henry Kinnersley, co-founder of Snowcap Research, an activist investor that has previously warned of financial inconsistencies in the company’s renewable energy claims.
Almost two years after a report by shortseller Hindenburg Research accused the Adani Group of decades of fraud and market manipulation, federal prosecutors in the US have alleged that Adani and a number of people around him promised more than $250 million in bribes to Indian government officials in exchange for solar energy contracts for Adani Green.