Inflation Reduction Act ‘has changed where we invest, if not how we invest’

One year on, investors reflect on the ‘powerful economic tailwind’ this US policy has created

Inflation reduction act


Michael Nelson

On 16 August 2022, the US established the Inflation Reduction Act, providing $500bn in new spending and tax breaks to kickstart the US economy.

According to global management consulting firm McKinsey, the act aims to generate investments in green technology, encourage a boost in domestic manufacturing capacity and mandate recipients of the many funding streams to demonstrate equity impacts.

“The American people won, and the climate deniers lost,” said US president, Joe Biden, on the passage of the act. “The Inflation Reduction Act takes the most aggressive action to combat the climate crisis – as the Speaker said – ever, ever, ever.”

Given this optimistic assessment, ESG Clarity asked experts in the investment industry how the Inflation Reduction Act has changed the landscape for sustainable finance, on the occasion of its one-year anniversary.

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