Opinion: Why U.S. companies will ignore Trump's withdrawal from the Paris climate agreement

June 6, 2017 by Frederik Dahlmann, The Conversation

Donald Trump's decision to withdraw from the Paris climate accord has received widespread condemnation from political leaders, scientists, activists and climate experts. Perhaps surprisingly, a number of big businesses have also voiced their disagreement with the US president's move.

Among others, well-known companies such as Apple, General Electric, Google, Facebook, Goldman Sachs, Tesla, Morgan Stanley, PepsiCo, Walmart and Walt Disney all condemned the announcement and vowed to continue with their own efforts to protect the environment regardless. Coupled with statements from states and cities, as well as other organisations, this shows that while the president may be appealing to a very specific slice of his electorate, many Americans are decidedly critical. Even large oil companies such as ExxonMobil and Chevron have argued against withdrawal.

It's clear why. Climate change cannot be ignored and these companies are better off moving with the times – and profiting from it in the process.

Competitive advantage

Trump had campaigned against the Paris Agreement. He argued it placed a heavy burden on America's economy by putting people (notably coal miners) out of jobs to the benefit of other nations.

Of course, all policy decisions have an impact on business in some way. But the US president's assertion that taking steps to limit is bad for business is evidently wrong given the very significant growth in renewable energy investment and jobs in recent years. For example, in the US, there are already more than twice as many more people employed in the solar energy sector compared to coal.

Indeed, many of the US' biggest companies are its most innovative. And it has been their engagement with change that has led to significant (green) product innovations and process improvements that have saved businesses countless dollars in energy costs. Take Campbell Soup for example. Until 2020 its aim is to reduce its environmental footprint including carbon emissions by 50%. The 's varied initiatives span across reducing waste, water and packaging, but it also made improvements in the transporting and handling of raw materials and ingredients.

This kind of innovation, in turn, makes companies more competitive internationally. It also improves their reputation with customers and attracts a workforce that increasingly demands this kind of action from their employers. Trump's focus appears extremely narrow in its overriding concern for one particular sector – coal. But then this garners him crucial political support. Meanwhile, he ignores the large gains enjoyed by other industries.

Many leading companies increasingly integrate proactive responses to climate change in their strategies by setting ambitious science-based carbon reduction and broader sustainability targets. They also aim to source their electricity exclusively from renewable sources and are offering incentives to all their employees to help them reduce carbon emissions. At a time when costs in the renewable energy sector are falling significantly, many American companies are simply realising the commercial opportunities from reducing their emissions, sourcing their own clean electricity, and developing products and services to help others reduce their emissions.

Moving with the times

Fossil fuel energy companies, for their part, have long faced public pressure to recognise the global threat from climate change and ensure they play their part in the wider energy transition. In recent years, however, their shareholders have also grown increasingly concerned about a potential carbon bubble, which would potentially leave oil reserves (and thus future profits) stranded.

There has therefore been a slight shift in these companies' stance towards less opposition to climate action. Even the shareholders of the world's largest public oil company, ExxonMobil just voted in favour of the fossil fuel giant being more open about the risks it faces due to climate change.

Coal mining companies, by contrast, are struggling. They have faced strong competition from US growth in natural gas production and their hopes for a revival are pinned on the Trump administration. But, as economies change, governments should focus on supporting and retraining those whose jobs are on the line. By trying to save coal, Trump is propping up a dying industry.

For the majority of other businesses, though, both competitive and shareholder pressures are driving them to cut their . While the US might now symbolically take its foot off the climate policy pedal, the response of its businesses and cities is likely to ensure that the consequences are less severe than feared.

The US prides itself as being the world's leading innovator. There is therefore hope that its companies can make both America and the planet great again – even if its leader refuses to engage.

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1 / 5 (3) Jun 06, 2017
It seems President Trump has done MORE good for climate change than anyone else in history. He has united the world and big business in a way no one else has. Gosh, he is caggy and knew just how to do it. Reminds me of Cassius Clay, by making everyone hate him, he brought boxing into a new golden age. He to knew just what he was doing. :-)
BTW Cassius Clay did not really change thru the years, we hated him before he protested the draft, we just finally saw his brilliance.
I guess in BOTH cases the end did justify the means.
5 / 5 (5) Jun 06, 2017
He has united the world and big business in a way no one else has.

Question: Not leaving the Paris accord would have...erm...divided the world and big business exactly, how?

I mean, Trump is certifiably stupid...but you are pushing even that boundary.

Going with the slogan: "He's good because he does stupid things"
Really? Is that the kind of platform for supporting him? (OK, if nothing else is left to you, I guess you have to laud him for being the biggest clown possible. On what planet that makes anyone 'great' is anyone's guess)
5 / 5 (3) Jun 06, 2017
seems President Trump has done MORE good for climate change than anyone else in history.

LOL. Just LOL.
Da Schneib
4.3 / 5 (6) Jun 06, 2017
Am I really hearing that some nutjob thinks Trump is good because he's a bad example?


1 / 5 (2) Jun 07, 2017
"Ignoring" the U.S. withdrawal from the treaty will accomplish about as much as staying in the treaty would have: essentially nothing. There are a lot of strong feelings about it, but when you examine what it would actually do to reduce or delay future warming, it becomes apparent the treaty's main effect is to reassure a bunch of politicians that they are "doing something" regardless of how ineffectual it is.
1 / 5 (2) Jun 07, 2017
Goals of global warming cabal: 1. Destabilize Western democracies. 2. Benefit 3rd world economies and command economies at the expense of the West. 3. Continue global warming distraction as a way to re-distribute wealth on a global scale, like their Marxist predecessors tried to do.
1 / 5 (2) Jun 07, 2017
China is increasing coal use 19% this year. What say, leftist global warming kooks? Nothing? Figures.
1 / 5 (2) Jun 07, 2017
President Trump has done much more than 1000 TIMES what all of you put together have done to bring global warming into the spotlight. :-) LOL
Go ahead tell us about YOUR global achievements or your $10 donation to stop global warming. Oh, I forgot it is easier to point at someone you don't like than to actually do somthing yourself.
1 / 5 (1) Jun 07, 2017
That's like saying Hitler has done much more than 1000 TIMES what we all put together have done to bring European Jews into the spotlight.
1 / 5 (1) Jun 07, 2017
That's like saying Hitler has done much more than 1000 TIMES what we all put together have done to bring European Jews into the spotlight.

So barakn are you interested in facts or what is politically correct?
not rated yet Jun 07, 2017
Because they're not total idiots! What ever happened to the right respecting the bottom line?

Just shows that ego identity counts more than facts, these days.

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