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The 2024 US Presidential Election: Shaping AI Regulation and ESG Policy | Eversheds Sutherland (USA) LLP
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The 2024 US Presidential Election: Shaping AI Regulation and ESG Policy | Eversheds Sutherland (USA) LLP

Legal Telescope: The AI-ESG nexus – redefining legal and regulatory strategies

With one presidential candidate more inclined toward robust regulation and the other more inclined to loosen regulatory requirements, the outcome of the 2024 US election will significantly influence the direction of AI governance and ESG disclosure requirements at the federal level, with profound implications for both domestically as well as globally. .

Shaping AI regulation and governance

As AI’s promise of revolutionary opportunity confronts warnings of revolutionary risk, Congress has been deadlocked over whether to promote a rapid and relatively unfettered pursuit of opportunity, particularly in the face of competition from countries like China, or whether to move more slowly and break less stuff. .

The current administration has overcome this legislative deadlock through both executive orders and sometimes aggressive interpretation of existing statutory authority, addressing key issues such as data privacy, algorithmic transparency, and the ethical use of AI. If Vice President Harris becomes president, we can expect continued executive actions that prioritize risk reduction, as well as calls for Congress to enshrine a more prudent approach in law, including measures to prevent bias in AI systems, enforce transparency in processes AI decision-making and personal data protection.

If former President Trump returns to the Oval Office, we can expect executive actions to minimize regulatory burdens and prioritize innovation, particularly in the name of global competition. This could include the repeal of President Biden’s executive orders on artificial intelligence and greater investment in military artificial intelligence capabilities.

Regardless of the presidential election, states are likely to fill the gap, leading to a disparate patchwork of laws — and perhaps even more fragmented than in the data privacy context, as states try to address certain uses of AI, such as underwriting algorithmic or to protect certain populations such as children.

Impact on ESG policies

The election will also have a significant impact on ESG policies, which have gained increasing importance among investors and stakeholders. The direction of ESG policy and disclosure requirements will depend on management’s position on sustainability and corporate responsibility.

An administration dedicated to sustainability and social equity can introduce stricter ESG reporting standards. This could involve mandating greater transparency on issues such as carbon emissions, labor practices and board diversity. Enhanced disclosure requirements would push companies to adopt more sustainable and socially responsible practices, aligning with global ESG trends.

Conversely, an administration focused on economic growth and deregulation could relax ESG disclosure requirements. This could slow the momentum of ESG initiatives, potentially reducing the focus on sustainability and social responsibility in corporate strategies. Divergence in policy direction will influence how companies approach ESG issues and shape their long-term strategies.

Energy policies will also be a critical factor as they directly influence ESG developments. The outcome of the election could determine the level of commitment to renewable energy, climate change mitigation and the transition to clean energy. An administration that prioritizes clean energy initiatives could accelerate the shift to sustainable energy sources, influencing global energy markets and encouraging other nations to follow suit, but doing so could impose costs in the energy sector and beyond.

The 2024 US presidential election is poised to shape the future of both AI regulation and ESG policies. The direction of AI governance will depend on the administration’s approach to balancing innovation and regulation, while ESG policies will reflect the government’s commitment to sustainability and corporate responsibility. On both fronts, the election outcome will also set the tone for international standards and cooperation, highlighting the interconnectedness of these critical issues.

(View source.)