Chapter 14: Financial Regulations and ESG Investing: Looking Back and Forward

Regulations and government policy are key elements in the success and growth of environmental, social, and governance (ESG) investing. Regulation refers to a broad array of mandatory requirements, guidelines, incentives, and other types of policy intended to steer the flow of capital, not just by government, but also by industry. This chapter explores the current state of play of relevant regulations, looking specifically at how targeted regulations and policies enabled clean energy—today’s biggest sector of sustainable investing representing about $300 billion per year since 2010. The chapter concludes with an outlook on where regulations and government policies supporting, and sometimes blocking, ESG-screened investing are likely to proceed in the coming decade.