As the Trump administration continues to flip-flop on whether or not the United States should remain in the Paris climate agreement, investors managing a collective $15 trillion in assets are urging the world’s biggest economies to stand by their climate commitments.
In a letter addressed to all members of the G7, over 200 investors called on the world’s strongest economies to make climate action a priority, citing economic concerns over how the consequences of climate change could impact their business.
“As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments,” the letter, which was signed by 214 institutional investors, said. “We urge all nations to stand by their commitments to the agreement.”
The letter is hardly the first time members of the international business community have urged countries to remain in the Paris agreement, which was signed by nearly 200 countries in December of 2015. Trump campaigned on a promise to withdraw the United States from the agreement, incorrectly claiming that the agreement gives foreign countries control over what kind of energy the United States uses.
In reality, the agreement was built off of individual commitments by participating countries, giving each country the autonomy to decide how best to reduce its carbon emissions. And many in the business community — including fossil fuel giants like ExxonMobil — acknowledge that curbing climate change would have clear economic benefits. One study from the United Nations Development Program found that, without the Paris agreement and its resulting emissions reductions, the global economy could lose as much as $12 trillion by 2050.
Pelle Pedersen, head of responsible investment at a Danish pension fund that oversees some $38 billion in funds, told the Financial Times that Trump withdrawing from Paris would be “poison for global climate efforts and leave investors in a limbo of uncertainty.”
Mid-year negotiating sessions are currently underway in Bonn, Germany, with participating nations meeting to discuss moving forward with the Paris agreement. The United States sent only seven representatives to the talks this year, down from 45 two years ago.
The Trump administration has said that it will issue a final decision on whether to remain or withdraw from the agreement before Trump heads to the G7 meeting in Italy on May 15. The administration appears internally conflicted about the agreement, with people like EPA Secretary Scott Pruitt arguing for a withdrawal, and Secretary of State Rex Tillerson arguing for the U.S. to remain in the agreement.
Last week, rumors from the White House suggested that the administration was leaning towards withdrawing from the agreement.
Other nations have said that they will continue to move forward with their individual commitments to the Paris agreement even if the United States reneges on its promises. China, for instance, has emerged as a vocal proponent of the deal, with Chinese president Xi Jingping praising the agreement during his speech at the World Economic Forum in Davos, Switzerland in January.
“It is important to protect the environment while pursuing economic and social progress — to achieve harmony between man and nature, and harmony between man society,” Xi said.