Superannuation investors have hit out at US president Donald Trump’s decision to withdraw from the Paris climate agreement that commits signatories to hold global temperature at below 2 degrees above pre-industrial levels.
“The Paris Agreement is key to providing the long term policy signals that investors need to best tackle climate change. Without a clear, stable policy framework and shared goals to work towards, responding to climate change will be harder and more expensive for all countries,” said Emma Herd, CEO of the Investor Group on Climate Change
“We call on governments to stand by the commitments they made under the Paris Agreement to unlock the investment needed to move to a net zero emissions global economy.”
Australian Council of Superannuation Investors (ACSI), Louise Davidson described the decision as “retrograde”.
“It is disheartening to see a decision like this, by a wealthy industrialised nation, which flies in the face of scientific knowledge and investor concerns,” she said. “The decision by the Trump administration to withdraw from the Paris Agreement is out of step with community expectations that governments will act in the face of these very real dangers.”
Major corporations also came out against the move. BHP Billiton chief executive Andrew Mackenzie voiced “disappointment” with the decision, after revealing he had personally asked President Trump to remain in the Paris climate deal, the Australian Financial Review has reported.
But a spokeswoman said the US decision did not alter BHP’s support for the accord, “which we believe provides a solid foundation for a global response to climate change and for the transition to a less than 2°C outcome”.
Mr Mackenzie and BHP chairman Jac Nasser met with Donald Trump in New York in January. But insiders said they had not lobbied him on political issues.
Electricity and gas supplier Origin Energy and Engie, owner of the Victorian coal fired generator Loy Yang B, also expressed disappointment with the move.
Mr Herd told The New Daily that despite the US withdrawal, the agreement still covers 190 countries responsible for 70 per cent of world carbon emissions.
Frank Pegan, IGCC chair and CEO of Catholic Super said “investors fought long and hard for a strong and effective climate change agreement in Paris. It is now up to governments to stand by the commitments they made and implement their national plans to reduce greenhouse gas emissions and respond to the physical impacts of climate change.”
“As long term investors, we are actively looking to support low carbon solutions and work in partnership with government to ensure that policy delivers on ambition,” he said.
Chris Newton, Executive Director, Responsible Investment at IFM Investors said: “IFM Investors takes a long term view… When it comes to climate change, it is essential that the decision makers in the financial markets, board rooms and at a policy level take the same approach. ”
“Understanding and managing for the impact of climate change on assets is clearly stated in our Responsible Investment charter. These are not just words for us, they are a part of our long term investment view,” Mr Newton said.
ICGG has 60 members with over $1 trillion in investments. On 22 May 2017, more than 280 international investors with over $17 Trillion in assets under management signed a joint letter calling on Governments to implement the Paris Agreement.
The letter was coordinated by six investor organisations, including IGCC.