President Donald Trump announced Thursday that the United States would withdraw from the Paris Agreement, an international accord on climate change that had been supported by many institutional investors.
In a speech at the White House Rose Garden, Trump said the U.S. would immediately cease its compliance with the climate treaty, claiming that the pact was “very unfair” to the U.S. and citing economic concerns about its effect on jobs.
Last month, 217 institutional investors representing $15 trillion urged world leaders to stand by the Paris Agreement, which requires nations to reduce their carbon emissions in an attempt to keep global warming below 2 degrees Celsius. The group included pension funds, insurers, foundations, and asset management firms, among them the California Public Employees’ Retirement System and Sweden’s AP funds.
“CalPERS supports the Paris Agreement because it makes financial sense,” Chief Executive Officer Marci Frost said in a statement made after Trump’s speech. “As a global investor and as fiduciaries focused on the long-term sustainability of our investments, we will continue to support the Paris Agreement on climate change.”
The U.S. had committed to the climate treaty last year under President Barack Obama. By pulling out, the U.S. will be one of the only nations to reject the Paris Agreement, which had been the first legally binding global pact to fight climate change.
Trump said that the U.S. would soon begin negotiations with other nations either to re-enter the accord on new terms or develop a new climate treaty.
“Despite recent federal actions to withdraw the United States from the Paris Climate Change Agreement, CalSTRS remains steadfastly focused on our commitment to advancing long-term sustainability on a global scale,” Jack Ehnes, CEO at California State Teachers’ Retirement System, said in a statement.
“As a powerful institutional investor committed to increasing climate change awareness, CalSTRS acknowledges that environmental risks, both current and those projected over the next 10 to 25 years, absolutely must be considered as part of our fiduciary responsibility,” he said.
The risks to the environment warrant mitigating strategies driven by active shareholders, like CalSTRS, to hold portfolio companies accountable and propel them through positive change, according to Ehnes.
New York City Comptroller Scott Stringer also sees harm in the president’s decision to withdraw from the Paris agreement, vowing to fight back and work towards a sustainable future in a low carbon economy.
“This Administration has once again put itself on the wrong side of history. Man-made climate change is real, the science is incontrovertible, and the threat to our planet is undeniable,” Stringer said in a May 31 statement on Trump’s plan to back out of the accord. “If Washington works to turn back the clock on the environment, cities like New York will continue to stand up and protect it.”
