President Donald Trump’s first weeks in office have brought a flurry of proclamations and activity aimed at suspending or reversing the Obama administration’s policies, particularly with respect to environmental oversight and enforcement as well as regulatory actions related to climate change. The new administration has promised to curtail regulation and seek significant staff and budget cuts at the United States Environmental Protection Agency (“EPA”). In addition, President Trump has appointed Oklahoma Attorney General Scott Pruitt to head EPA, a man who currently is suing the agency, challenging its signature climate change rule, the Clean Power Plan, and who describes himself as “a leading advocate against the EPA’s activist agenda.” In this climate, one might be tempted to ask whether environmental compliance and stewardship should remain a priority for a fund or its portfolio companies. After all, the top cop on the beat may have a limited mandate and lack the means with which to fulfill its mission for the foreseeable future, but we caution you not to lose sight of the potential importance of environmental matters for the following reasons.
The full impact of the Trump administration’s environmental policy decisions remains to be seen; however, as discussed above, there are several compelling reasons for our sponsor clients and their portfolio companies to continue to pay attention to environmental compliance and performance over the near and long term.