Donald Trump has won the White House and Republicans have won a larger-than-expected majority in the Senate. The outlook for the House is still unclear but leans toward a very narrow Republican majority and therefore a Republican sweep. This outcome is set to have significant reverberations on a plethora of ESG dimensions.
In this week’s podcast, Ehsan Khoman, Head of Research – Commodities, ESG and Emerging Markets (EMEA), examines the ESG implications from president Trump’s second term in office. He believes that top of mind will be amendments to the US Inflation Reduction Act (IRA) – the largest piece of climate legislation in US history – with the focus on less of a full repeal (given the majority the surge of IRA investments and jobs created has predominantly flowed to Republican congressional districts), but rather targeted reductions on loan guarantee and grant programmes as well as consumer tax credits, such as electric vehicle purchases – particularly around foreign entity of concern (FEOC) requirements. A broader risk is the formal US withdrawal from the Paris Agreement in early 2026 (akin to Trump 1.0), with a larger emphasis on fossil fuels, with decarbonisation efforts likely to become more nuanced and led by state policies as well as private sector initiatives.
The MUFG Global Markets Podcast can be found directly on our MUFG Podbean page or via a number of platforms, including Spotify, Apple, and Stitcher.