Regulation & Public Policy

Déjà Vu:
World, Business Leaders Unswayed by US Regression on Climate Change

Just like last time the US was withdrawn from the Paris agreement, global business and government leaders have responded by doubling down on their commitments, and highlighting the missed opportunities and the US’ diminishing leadership and competitiveness as a global power.

Published 10 minutes ago | About a 6 minute read

Image: Pexels

Right around this time eight years ago — the first time a president withdrew the US from the Paris climate agreement — heads of major corporations from the US and around the world banded together and asserted the business imperative for pursuing meaningful climate action, even in the face of contrary governmental priorities.

This week, as wildfires continue to devastate the Los Angeles area and unprecedented snow and ice bury the southeastern US, that returning president once again withdrew the US from the Paris climate agreement. But, just like last time, global business and government leaders aren’t swayed — instead, they’re doubling down on their own commitments, and highlighting the enormous opportunities being forfeited and the US’ diminishing leadership and competitiveness as a global power.

Because, unlike the new president, most of the rest of the world now understands the reality of climate change, the imperative for climate action and the opportunities it presents:

The global clean-energy boom is now well underway and the US economy is already reaping the benefits: Texas and Iowa are leading the country in wind power, California leads in solar energy generation; and lucrative opportunities from carbon dioxide removal and cleantech manufacturing and development have been identified, down to the county level, across the US.
As growing climate volatility threatens markets and supply chains around the world, resilience is now a KPI for future-proof business and climate preparedness is now an essential component of corporate resilience; the global climate adaptation market is set to more than double — from US$22.90 billion in 2024 to $49.24 billion by 2032.
A mountain of recent studies break down the steep financial losses and transition risks of inaction as extreme weather events escalate, natural resources dwindle and global climate regulations tighten — whereas businesses investing in adaptation, resilience, decarbonization and safeguarding nature are already realizing tangible returns.

Forward-thinking orgs keeping eyes on the prize

The US administration’s decision to once again reverse course on climate action naturally elicited reactions from every sector.

As World Resources Institute President & CEO Ani Dasgupta said in a statement: “Walking away from the Paris Agreement won’t protect Americans from climate impacts, but it will hand China and the European Union a competitive edge in the booming clean energy economy and lead to fewer opportunities for American workers. It simply makes no sense for the United States to voluntarily give up political influence and pass up opportunities to shape the exploding green energy market. Sitting on the sidelines also means the United States will have fewer levers to hold other major economies accountable for living up to their commitments.

“While the US administration retreats, states, cities and businesses across the US will continue driving climate action forward. And clean-energy incentives from the Inflation Reduction Act will continue to be an economic boon for communities nationwide, thanks to strong support from many Republicans and Democrats alike. Make no mistake, America will still be very much in the global fight against climate change.”

The C40 global network of mayors concurred and reaffirmed their commitment to meaningful climate action. Kate Gallego — Mayor of Phoenix, Climate Mayors Chair and C40 Cities Vice-Chair — said: “Regardless of the federal government’s actions, mayors are not backing down on our commitment to the Paris Agreement. The cost of inaction is simply too high. As we have recently seen from the devastating wildfires in Los Angeles, extreme summer temperatures in Phoenix, and hard-hitting hurricanes in North Carolina and Florida, the effects of our changing climate are at our doorstep. Our constituents are looking to us to meet the moment and deliver meaningful solutions, which is why we’re expanding our work with partners across the United States — from philanthropy and business leaders to members of Congress and governors. We’re building an implementation plan that meets our targets under the Paris Agreement and ensures that our cities remain resilient and prosperous for future generations.”

Abroad, European Commission president Ursula von der Leyen asserted from the World Economic Forum’s Annual Meeting this week in Davos: “Europe will stay the course and keep working with all nations that want to protect nature and stop global warming.” And Chinese Foreign Ministry spokesperson Guo Jiakun said: “Climate change is a common challenge facing mankind,” adding that “no country can be outside of it. No country can be immune to it.”

On the business front, Amazon chief sustainability officer Kara Hurst told the New York Times the tech giant will not walk back its climate targets because of the president’s decision: “We’re dedicated to our goals. We’re staying the course. We’re not veering from that. I think most of the corporates have long-term goals that they’ll keep.”

IKEA CEO Jesper Brodin concurred, saying: “For us, who have been on the bumpy train ride for a couple of years, we are discovering year by year how we actually not only can succeed to deliver to the Paris Agreement but actually how it benefits business.”

And the We Mean Business Coalition — which comprises over 16,000 companies committed to bold climate action — said in a statement:

“While it is deeply disappointing that the new US presidential administration has decided to withdraw the US from the Paris Agreement, one country’s decision does not change the global course of action.

“Many of the world’s major economies are putting forward ambitious commitments in their updated national climate plans, as designed by the Paris Agreement. They understand that these plans are a mechanism to attract investment to their countries and gain competitive advantage. And many of the world’s largest businesses are … conscious of the increasing climate risks they face in their operations and value chains, and proactively managing them as the safest route to competitiveness and financial success.

“Companies need market stability, policy consistency and predictability to make long-term business investments; and a shifting policy direction discourages investment in America. The US federal government’s step away from international policy discussions that are shaping the clean energy future is a disservice to American businesses and people, opening the door for other major economies to attract greater investment and talent. Other countries will continue to accelerate their transition to clean energy because it makes good business and economic sense.”

In this era of increasing environmental, social, political and climate-related turmoil, businesses and governments that remain committed to improvement regardless of the political and regulatory landscape will be the ones to stand the tests of time.