Donald Trump’s return to the White House dented green investment, but for a contrarian minority, it had the opposite effect.
A Swiss Finance Institute study finds US green allocations dipped after the 2024 election, as some investors viewed climate-themed funds as riskier and less profitable.
However, those who strongly disapproved of Trump’s climate stance increased their exposure, treating them less as a financial bet, than a moral statement.
For them, going green became less about alpha, more about impact.
The window to opt-out of auto enrolment opens in July: should workers stay or go?
What tax are we liable for on home we inherited where our mother had ‘right of residence’?
Can the company that shaped cancer treatment reinvent itself?
EU agricultural policy needs to make clear link between subsidies and emissions reductions
One respondent bluntly said: “Trump’s win will have a serious effect on the environment, and I’d want to make that choice that has even a tiny impact.”
The less they believed others cared, the more compelled they felt to act. ETF flows suggest this wasn’t just talk.
Investors became less sensitive to performance and more motivated by values, seeking meaning or “warm glow” over financial gain – an investment choice that felt “emotionally rewarding”, even if not financially so.
There are two problems, however. First, green investing can only partly offset weak climate policy, the researchers caution.
Second, it’s a shaky investment rationale. Panmure Liberum strategist Joachim Klement supports ESG investing, but warns politics and investing don’t mix.
“Investing in green funds as a form of virtue signalling or to spite Trump”, he says, “is about the worst reason to invest.”
