Republican presidential candidate and former US President Donald Trump shouts during a campaign event in Freeland, Michigan, USA on May 1, 2024.
Brendan McDermid | Reuters
The U.S. Securities and Exchange Commission is set to roll back the government agency’s aggressive stance against the corporate giants helmed by current Chairman Gary Gensler during Donald Trump’s second term as president, according to people familiar with the matter.
If Trump loses President Joe Biden The Securities and Exchange Commission under his leadership last November may be the first to cut back on many of the recently implemented environment-related rules, according to experts and people close to the former president. The SEC’s original goal under the second Trump administration was to eliminate new climate disclosure rules, these people explained.
executioner The U.S. Securities and Exchange Commission passed a rule in March requiring large public companies to disclose their greenhouse gas emissions. The largest companies must disclose climate information as early as fiscal 2025 and specific information on greenhouse gas emissions as early as fiscal 2026.
Gensler believes that greenhouse gas emissions and other climate-related data have a significant impact on companies, and investors should understand this information.
But the SEC, chaired by a Trump-appointed Republican, may roll back those Biden-era disclosure requirements, these people said.
One person who advises Trump on SEC matters said the rule “costs companies and investors a huge amount of money and brings them nothing.” Like others in this story, they requested anonymity in order to speak about private conversations.
Some of them explained that the prospect of Trump rolling back the SEC’s climate disclosure rules also has to do with the former president’s dislike of environmental, social and governance investment standards.
During his term, Trump issued an executive order making it more difficult for employers to provide ESG funds in employees’ 401(k) retirement plans. The Biden administration later softened Trump’s rules.
In February, he said in an article for The Truth Society that he would restore his previous rule if he was re-elected.
A Trump spokesman did not respond to CNBC’s request for comment.
BlackRock, Vanguard Group face pressure
Trump’s second term will focus on ESG-related issues with the SEC and other agencies, which could cause trouble for some of the largest investment managers in the United States, such as black stone and Pioneer.
These companies have long provided customers with environmentally friendly investment options. But the existence of these options has created a political storm for these companies in recent years. The backlash was orchestrated by some of Trump’s political allies.
A Texas Public school funds recently pulled $8.5 billion from BlackRock’s management because of the company’s reluctance to invest in fossil fuels. Florida Withdraw an additional $2 billion in 2022, accusing BlackRock of prioritizing ESG over investors. Both states are led by politically ambitious Republican governors, Ron DeSantis of Florida and Greg Abbott of Texas.
Press representatives for BlackRock and Vanguard did not immediately respond to requests for comment. But the companies vehemently deny they are putting the climate ahead of their customers. BlackRock and Vanguard are both fiduciaries, which means they have a legal obligation to put their clients’ interests first.
Still, one Trump ally told CNBC that he plans to discuss with the former president soon how to use the power of the Trump administration to push back on ESG investing guidelines.
For example, if Trump is re-elected and signs an order banning retirement investment funds from considering ESG, he could call on allies in Republican-led states to pressure investment firms to cut environmental investment guidance. .
“You take executive action at the federal level and then you call the treasurer and put pressure on investment funds to abandon ESG and get more states to divest from those funds,” a Trump confidant said.
Encryption issues
Jennifer Lee, an attorney and former assistant director of the SEC’s Enforcement Division, said one possible exception to the SEC’s restrictions on aggressive regulation during Trump’s second term is its approach to the cryptocurrency industry.
“The SEC under the first Trump administration vigorously pursued cryptocurrency cases and sought to bring sunshine and regulation to the industry,” Lee said.
“Under a second Trump administration, we expect the SEC to continue its efforts to define its space and get involved in crypto.”
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