Despite Trump's climate policy, investors went green

The 2024 US Presidential Election was seen as a watershed moment for climate protection. An international research team, including the University of St.Gallen (HSG) asked how Donald Trump's election and his disregard for climate protection influenced investors' willingness to invest in green funds.

The study was based on extensive surveys with financial incentives conducted among 2,392 private investors in the US immediately before and after the November 2024 election. The aim was to gain a good understanding of how decisions about green investments and the motives behind them are influenced by the political context.

Investing green to counteract politics

On average, the proportion of green investments among respondents fell by 3 percentage points immediately after Trump's election victory – a decline that was mainly due to the deterioration in expected returns for green funds. However, a subgroup of investors who sharply criticised Trump's climate policy increased their green capital share in relative terms. An analysis of the motives stated by these investors themselves shows that after the election, they placed greater emphasis on climate protection in their financial decisions and gave less weighting to financial considerations. This motivation accounts for around 20 per cent of all changes in green investments after Trump's election. “These investors thus appeared to specifically align their investments with climate aspects in order to compensate for perceived political deficits,” says Assistantprofessor Stefano Ramelli from the Swiss Institute of Banking and Finance at HSG. He conducted the study together with researchers from the Universities of Zurich and Amsterdam.

Financial providers must take moral motives more seriously

These results shed light on a phenomenon that has received little attention to date: political contexts influence not only economic conditions, but also the weighting of moral values in investment decisions. The results underscore the surprising resilience of demand for green investments in the face of unfavourable climate policy scenarios. “It is up to the supply side of the financial markets to respond to this sustained, if not increasing, demand for socially responsible investments," says Prof. Dr. Stefano Ramelli.