Biden's Mega Infrastructure Investment Plan Brings 'ESG Fund' Momentum

Source: CNBC

[Asia Economy Reporter Yujin Cho] The so-called 'ESG' investment trend, which involves investing in companies that protect the environment, make socially responsible management decisions, and have sound governance, is expected to benefit from the Biden administration's infrastructure investment policy, according to the US economic media CNBC on the 4th (local time).

Amid the energy paradigm shift towards carbon neutrality, the COVID-19 pandemic, and global disasters such as the unusual cold wave in Texas, there is a growing consensus that investments should be made in protecting the environment and socially valuable causes, which has increased interest in ESG.

Furthermore, CNBC reported that the announcement of President Joe Biden's massive infrastructure investment plan, which prioritizes eco-friendliness as a core policy, is fueling the enthusiasm for ESG investment.

CNBC stated, "President Biden's infrastructure initiative and a series of measures to address climate change could be a tailwind for ESG fund investors," adding that the heightened interest in ESG in the capital investment market is bound to grow further due to Biden's infrastructure investment plan.

It also said, "The infrastructure investment plan, focusing on supporting the electric vehicle industry, housing supply, and renewable energy investment, will also stimulate investment in smart grid technology, alternative energy, 5G, automation and robotics, and artificial intelligence (AI), thereby invigorating ESG funds."

The scale of ESG funds has been growing annually. According to Morningstar data, ESG funds raised $51.1 billion in new capital last year alone, outperforming traditional funds. Among the top four funds in investment categories over the past three years, three are ESG funds.

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