US President Donald Trump’s decision to pull the USA out of the Paris Climate Agreement will also not halt a move away from fossil fuels, according to investment experts.
Trump’s announcement will not be without diplomatic and economic consequences for the US, according to David Sheasby, head of governance and sustainability at fund manager Martin Currie. “The questionable economic rationale aside, there is little doubt that this will neuter US foreign policy further – we’ve already seen widespread criticism from other governments including a joint statement by France, Germany and Italy underlining that there will be no re-negotiation of the agreement. It is worth noting that only two other UN members – Syria and Nicaragua – are outside of the deal,” Sheasby commented.
In a statement, index provider MSCI said that while regulatory pressures have historically driven efforts to reduce carbon emissions, technological and market factors are now playing a greater role in altering the energy mix and lowering greenhouse gas (GHG) emissions. It added: “The aspiration for clean air is leading to stringent vehicle fuel efficiency norms globally including increased adoption of electric vehicles” and added that a desire for energy independence by major energy importers is leading to increased adoption of renewable energy. Martin Currie’s Sheasby concluded: “As stewards of our clients’ capital we take the long view, and although we are disheartened by the announcement, will continue to rigorously assess how the companies we invest in are prepared for the eventual demise of the fossil fuel era.”