The founding partners of the Investor Agenda, a group of sustainable investing focused organizations announced the publication of an open letter urging the United States to rejoin the Paris Agreement, following the country’s formal withdrawal from the accord today.
The Paris Agreement is a multi-nation pact developed by parties to the United Nations Framework Convention on Climate Change (UNFCCC) to combat climate change. The agreement’s main goal is to limit the global temperature increase in this century to below 2 degrees Celsius above pre-industrial levels, and to work toward limiting the increase to 1.5 degrees.
The Trump administration announced in June 2017 that it intended to withdraw from the agreement, claiming the economic cost of the accord was too high, and unfair to the United States. The withdrawal becomes effective today. 189 nations ratified the agreement, and the U.S. is the only country to have formally exited.
The six signatory organizations to the letter include CDP, Asia Investor Group on Climate Change (AIGCC), Ceres, Investor Group on Climate Change (IGCC), Institutional Investors Group on Climate Change (IIGCC), and Principles for Responsible Investment (PRI).
The signatories point out that counter to the claims of the high cost of the accord, achieving the goals of the agreement by limiting global temperature rise would have the effect of curbing the worst financial and economic impacts of climate change, while enhancing institutional investors’ ability to generate sustainable returns for their beneficiaries. The group points out that the Paris Agreement has broad investor support, including 631 investors, representing more than $37 trillion in assets, who have signed the Global Investor Statement to Governments on Climate Change, calling for all governments to implement the necessary climate actions and policies to achieve the Agreement’s goals.
The group also explain that participation in the transition to a net zero emissions economy can generate significant investment opportunities, in areas including clean technologies, green infrastructure and other assets, among others. On the other hand, according to the group, countries that decline to step up their climate action and policy ambition will find themselves increasingly at a competitive disadvantage.
The letter concludes with a call for the United States to return to the agreement:
“Now is the time for the U.S. to not only re-enter the Paris accord, but also for the U.S. to join other nations in ratcheting up ambition, policies and targets to achieve the goals of the Paris Agreement. Investors stand ready to welcome the U.S. back into the global accord and call on all governments to ensure their national response to the climate crisis and the economic downturn are consistent with a 1.5 degree world.”