Joe Walsh for EnvironentalFinance.com:
Moody’s Investors Services points to the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosure (TCFD) as evidence of the direction of climate policy momentum in the financial sector.
It is a growing area, with signatories to the Principles for Responsible Investment (PRI) growing fivefold from 2006 to 2016. Moody’s believe this trend will continue regardless of US policy.
In addition, Moody’s points to the other three largest emitters: China, the EU and India all reaffirming their commitments to the Paris Agreement and sub-national decarbonisation programmes in the US as key reasons why federal policies can’t derail climate progress.
These include programmes such as California’s cap-and-trade scheme, covering carbon emissions in the state, as well as the Regional Greenhouse Gas Initiative (RGGI), which is a similar programme involving nine states in the North East of the US.
It is something Lenny Hochschild, managing director and head of the Carbon Americas group at Evolution Markets agrees with. He previously told Environmental Finance “I don’t see the federal election affecting California’s policy [on carbon markets].”
The sentiments are not unique to Moody’s, with Matt Christensen, Head of AXA IM responsible investing, Martina Macpherson, head of sustainable indices at S&P Global Dow Jones Indices, the indexes arm of S&P Global and Ian Simm, CEO of Impax all stating that Trump will not scupper the growth of environmental finance.
Trump policy intentions that raise doubts over the US climate action include:
- A reaffirmed commitment to eliminate the Climate Action Plan, a 2013 initiative brought in by Barack Obama that would reduce US carbon emissions to 26-28% below 2005 levels by 2025.
- Repeal the Clean Power Plan, which was due to force states to drastically cut the emissions in the power sector, via an executive action.
- Withdrawing from the Paris Agreement or simply ignore its voluntary commitments.
- Pull out of the United Nations Framework Convention on Climate Change altogether.