Stockholm (NordSIP) – The administration of U.S. president Donald Trump has delayed a much-anticipated decision on whether to withdraw from the 2015 Paris accord, it was widely reported Tuesday. The decision has been delayed until a G7 meeting in Italy at the end of May during the president’s first trip abroad, reflecting divisions within his administration on the wisdom of withdrawing from the treaty and wide international condemnation of the proposed move.
It also comes amid cautions from investors and nations alike that the U.S. would find it harder to negotiate or participate in future deals, including trade deals, alongside the amplified climate change threat represented by potential U.S. withdrawal. Among these warnings, a three-page letter has been sent to the G7 group of influential countries co-signed by 200 large investors (including Amundi and Schroders), representing $15 trillion in assets to uphold their commitments to tackling climate change as set forth under the Paris accord. The letter will also be sent to the G20 group this summer and is part of the effort to convince the U.S. to reconsider.
“Mr Trump’s potential decision to leave the Paris agreement would be poison for global climate efforts and leave investors in a limbo of uncertainty,” said Pelle Pedersen, head of Responsible Investment at PKA, the Danish pension fund overseeing €35 billion on behalf of 300,000 Danish workers. PKA is a signatory to the letter.
“With the U.S. threatening to pull out of the Paris climate agreement… now is the time for investors to make their voices heard by encouraging governments to stand firm on their commitment to the accord,” added Fiona Reynolds, head of the UN PRI.
“Regardless of the what the U.S. administration does, it is vital that every Paris agreement signatory across the G7 and G20 adopts policies that drive better disclosure of climate risk, curb fossil fuel subsidies and help to catalyse significant private sector investment in low-carbon solutions,” Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change in Europe, a forum for asset managers and pension funds that was instrumental in bringing the signatories together, said.
Mr Trump’s newfound hesitation on withdrawing from the accord, following one previous delay, is likely the combination of pressure of this nature exerted by investors and disagreements within his own cabinet pitting moderates like his daughter Ivanka and Secretary of State Rex Tillerson against hardliners like Steve Bannon. The move brings some hope there is still a chance the president might reverse himself, as he has done on multiple other instances since assuming the presidency upon realizing the difficulties involved with implementing many of his campaign promises.