Why US firms will ignore Trump’s withdrawal from Paris climate agreement

US President Donald Trump announces his decision that the United States will withdraw from the Paris Climate Agreement, in the Rose Garden of the White House in Washington

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 climate change 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 climate 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 company’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.

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