Trump SEC would repeal climate disclosure requirements and goal ESG investing

Under a second Donald Trump presidency, the Securities and Exchange Commission would reverse the aggressive stance the federal government agency has taken toward corporate giants under the leadership of current Chairman Gary Gensler, people conversant in the matter say.

If Trump lost President Joe Biden Under his administration, the SEC would likely begin scaling back lots of the recently implemented environmental rules in November, in response to experts and folks near the previous president. A primary goal of the SEC under a second Trump administration can be to roll back latest climate data disclosure rules, these people said.

hangman and the SEC passed a rule in March requiring large publicly traded firms to reveal their greenhouse gas emissions. The largest firms are required to supply climate disclosures as early as fiscal 12 months 2025, with details on greenhouse gas emissions as early as fiscal 12 months 2026.

Gensler argues that greenhouse gas emissions levels and other climate-related data have significant implications for firms and that investors should know this information.

But an SEC chaired by a Trump-appointed Republican would likely repeal those Biden-era disclosure requirements, these people said.

The rule “costs companies and investors enormous amounts of money and provides them no benefit,” said a one who advises Trump on SEC matters. Like others on this story, they were granted anonymity to recount private conversations.

Some of those people said the prospect of Trump withdrawing from the SEC's climate disclosure rules was also tied to the previous president's antipathy to environmental, social and governance investment standards.

During his time in office, Trump issued an executive order that made it harder for employers to supply ESG funds in employees' 401(k) retirement plans. The Biden administration later relaxed the Trump rule.

In February, he said in a Truth Social post that he would restore his previous rule if elected for a second term.

A spokesman for Trump didn’t reply to a request for comment from CNBC.

A second Trump term focused on ESG-related issues on the SEC and beyond could spell trouble for a number of the country's largest investment management firms BlackRock and Vanguard.

The firms have long been offering their customers environmentally friendly investment options. But the very existence of those options has led to political unrest inside firms lately. The backlash was orchestrated by a few of Trump's political allies.

A Texas The public school fund recently withdrew $8.5 billion from BlackRock's administration due to what it said was the corporate's unwillingness to take a position in fossil fuels. Florida withdrew one other $2 billion in 2022 and accused BlackRock of putting ESG above investors. Both states are led by politically ambitious Republican governors Ron DeSantis in Florida and Greg Abbott in Texas.

Press representatives for BlackRock and Vanguard didn’t immediately reply to a request for comment. But the businesses have vehemently denied that they’re prioritizing the climate over their customers. Both BlackRock and Vanguard are fiduciaries, meaning they’re legally obligated to place their clients' interests first.

Still, a Trump ally told CNBC that he plans to talk with the previous president soon about learn how to use the ability of a Trump White House to beat back against ESG investing policies.

If Trump is elected to a second term and signs an executive order banning ESG considerations in, for instance, retirement funds, he could then call on his allies in Republican-led states to pressure investment firms to limit their green investing guidelines, he said the person near Trump.

“You do the executive actions at the federal level and then you call treasurers to put pressure on the investment funds to divest from ESG and get more states to divest from these funds,” the Trump confidant said.

Under a second Trump term, a possible exception to the SEC's curbs on aggressive regulation can be its approach toward the cryptocurrency industry, said Jennifer Lee, an attorney and former deputy director within the SEC's enforcement division.

“The SEC under the first Trump administration vigorously pursued crypto cases and sought to bring light and regulation to this industry,” Lee said.

“Under a second Trump administration, we can expect the SEC to continue efforts to define its scope and reach in crypto.”