‘Earth shattering’: US investors react to EPA repeal of endangerment findings
US investors warn the rollback of EPA endangerment findings could undermine the US energy transition, disrupt long-term climate investments, and create costly regulatory patchworks
When the US administration last week announced it was revoking the “endangerment finding”, abandoning the idea that greenhouse gas emissions pose a threat to human health, the move was pitched as a pro-business initiative.
Repealing the Endangerment Finding removes a key regulatory framework that has historically guided US responses to climate-related risks.
Introducing the move, US Environmental Protection Agency (EPA) administrator Lee Zeldin described it as “the single largest deregulatory action in US history,” promising cost savings of $1.3trn for American households and reduced reporting burdens for US businesses, particularly car manufacturers.
But behind the scenes, long-term investors and industry experts are raising concerns about how the move will impact the competitiveness and resilience of US firms.
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Speaking to Net Zero Investor, one CIO for a US pension fund described the announcement as “earth shattering” and warned that it would complicate investment commitments to clean energy and sustainability, making them more awkward, difficult, or even impossible.
Highlighting that major energy transition investments involve large, long-term capital commitments, they cautioned about “unintended consequences of such near-draconian official positions.” Investors may become more cautious about retrofitting buildings, providing EV charging infrastructure, or might even prioritize coal over carbon-neutral energy sources.
“By ignoring or outright denying the scientific facts surrounding geology, climate change, and the damaging effects on Earth’s finite natural resources, a severe disservice is paid to future generations,” they added.
These concerns are echoed widely among US investor groups. Maria Lettini, CEO of the United States Sustainable Investment Forum (USSIF), highlighted a recent survey conducted by USSIF among US investors representing $61.7trn in assets, which found that 77% consider climate change the most important environmental factor when investing.
“The EPA claims the rollback of the Endangerment Finding will save American businesses and families $1trn, largely by reducing vehicle compliance costs. But the externalized costs—health, fuel, climate damages, disaster losses—shift to households, insurers, municipalities, and others, potentially converting avoided climate damages into real-economy losses while also increasing policy fragmentation and litigation risk,” Lettini warned.
She pointed out that many firms, even in oil, gas, and electricity, have supported federal regulation of greenhouse gases as legal cover against climate-related harms. Moreover, as multinational corporations, they remain subject to international regulations, such as CBAM and the Corporate Sustainability Due Diligence Directive (CSDDD). Since some states, including California, have already implemented GHG disclosure rules, the US now risks a “patchwork system” with higher compliance costs.
The changes could also impact investors with net zero targets. CalSTRS, one of the largest public pension funds in the US, managing $390bn in assets, declined to comment on the specific impact on its portfolio but reiterated that it would continue adhering to its net zero targets. “At CalSTRS, climate risks matter to our portfolio. That’s why we’re working to cut emissions across our investments by 2050 or sooner—to protect returns and do right by our members. Preparing for a low-carbon economy is a sound investment approach and a responsible path forward,” a spokesperson said.
Andrew Coburn, CEO of Risilience, a Cambridge University spin-out working with companies to quantify climate and nature risks, warned that delaying emissions reduction measures now could carry a sting in the tail later.
The rollback of greenhouse gas emissions rules in the US could prompt firms, such as car manufacturers, to delay vital reforms, making them less competitive than peers in China and Europe who are prepared to adapt. This increases the risk of a delayed, more disruptive transition. “Most of our delayed transition begins in 2030—that’s only five years away. The move will make it faster and more severe,” he said.
Reflecting on medium-term impacts for US industry, USSIF’s Lettini predicted legal challenges could prolong implementation. “The long legal battle ahead is likely to be drawn out. Businesses are unlikely to change their practices immediately. Plus, real compliance deadlines loom—from California's GHG emissions reporting framework in August 2026 to the CSDDD deadlines in July 2026,” she noted.
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