Brian Deese, former Global Head of Sustainable Investing at BlackRock, was announced as the incoming Director of the National Economic Council, a move that could signal environmental and social-focused rulemaking and executive orders from the Biden administration.
Deese brings both executive branch and Wall Street experience, having served as an economic aide to President Obama and as the head of BlackRock’s sustainable investing arm. However, his BlackRock experience has raised some concern among more progressive elements of the Democratic party as the asset manager continues to invest in energy companies producing greenhouse gasses. In the Obama administration, Deese worked on the economic aid package for the auto industry as well as the Paris accords on climate change.
Deese was a strong advocate for unionized workforces. In his announcement video, he specifically highlighted his focus on the "human stakes" and "good union jobs" when designing the auto industry rescue package. He also highlighted a desire to see the U.S. move beyond the Paris accord commitments in addressing climate change. President-elect Biden also made a point of highlighting his expertise on climate policy.
Outlook: In terms of environmental and social concerns, Deese will likely advocate a full reversal of the Trump administration’s policies. However, the Senate may well remain controlled by Republicans, thereby preventing more progressive legislation. As such, the Biden economic team could focus on rulemaking within multiple agencies or the use of executive orders to enact policies. This could entail additional human capital and environmental risk disclosures for government contractors, wider disclosure requirements at the SEC, and/or a reversal of DOL rules prohibiting ERISA-fund managers from considering ESG goals in investments. Given the concerns from the progressive wing of the party, companies should be prepared for a sustained and public focus on environmental and social concerns from Mr. Deese and the National Economic Council.