Factbox: Finance, corporate world gives cautious support for U.S. climate plan

Investment (THE)

23/04/2021 17:31

BOSTON/LONDON, April 23 (Reuters) - U.S. President Joe Biden
welcomed world leaders to a landmark climate summit this week at
which the world's biggest economy laid out a plan to cut
greenhouse gas emissions by 50%-52% from 2005 levels by 2030.
 urn:newsml:reuters.com:*:nL1N2MF14N
    Alongside that, Biden's administration pledged a range of
other measures including plans to increase the funding it
provides to international climate efforts, and help mobilise
more private finance internationally. urn:newsml:reuters.com:*:nL1N2MG0WN
    Below are comments on the news from financial service market
participants and various trade bodies.
           
    ERIC J. PAN, PRESIDENT AND CEO OF THE INVESTMENT COMPANY
INSTITUTE
    "President Biden’s climate finance plan along with Secretary
Yellen’s remarks yesterday rightly put the United States back at
the center of international deliberations on climate change and
indicates a critical understanding that companies should provide
investors better, useful, and comparable information to
investors such as investment funds."
    
    WAI-SHIN CHAN, CO-HEAD OF ESG RESEARCH AT HSBC
    "We think this new pledge is a step in the right direction
for the US, one which will give it clout when it comes to
climate diplomacy. The pressure is on other major emitters to
align their 2030 targets to a net-zero pathway. As businesses do
the same, we think investors will have to look through the
details to determine whether corporate strategies are properly
aligned to net zero, as well as consider the carbon footprints
of their own portfolios."

    REBECCA KARNOVITZ, SENIOR ANALYST AT MOODY'S INVESTORS
SERVICE
    "President Biden’s pledge at the Leaders’ Summit on Climate
cements the administration’s existing targets of reaching a
net-zero carbon emissions economy by 2050 and aligns U.S.
targets with those of the EU. Over the long term, such actions
are credit positive in that they should help reduce the expected
negative impacts of a changing climate for a broad swathe of
issuers across the globe, particularly sovereigns and regional
local governments who will be at the forefront of climate
adaptation and management efforts.
    "Currently, the large gap between climate adaptation-related
financing needs and low-cost funding sources threatens
sovereigns with highly negative exposure to physical climate
risk, especially those with already low fiscal strength. At the
same time, net-zero policy efforts may heighten credit risks for
many entities in carbon-intensive industries, but may also
create significant opportunities for those who adjust business
models to align with accelerated policy trends."
   
    JERRY THOMAS, HEAD OF GLOBAL EQUITIES AT SARASIN & PARTNERS
    The most promising aspect of President Biden’s climate
policy is its all-encompassing framework. The new administration
recognises the systemic challenge and is taking a multi-agency
approach to tackling it. Furthermore, the Biden approach
considers the role of the finance sector, which is critical for
aligning financial flows with climate change efforts.
    
    MARTY DURBIN, SENIOR VICE PRESIDENT OF POLICY AT THE U.S.
CHAMBER OF COMMERCE
    President Biden is setting out an ambitious goal with
today’s announcement. Achieving that goal while also supporting
economic growth and job creation will require new technology and
new policy that is durable and has the support of bipartisan
members of congress, consumers, business, and other
stakeholders. We will work with our members, the administration,
and Congress to forge durable, bipartisan policy that puts us on
a sustainable path to make significant and meaningful emission
reductions. We welcome President Biden’s focus on returning the
U.S. to international leadership on climate change. U.S.
businesses are leading the world in pursuit of climate change
solutions, and we see great opportunities to develop and export
technologies that will help address a truly global challenge.”
    
    MIKE SOMMERS, PRESIDENT & CEO AT THE AMERICAN PETROLEUM
INSTITUTE 
    “API supports the goals of the Paris Agreement to reduce
global emissions and alleviate poverty. The new U.S. nationally
determined contribution addresses only half of the dual
challenge of reducing the risks of climate change while ensuring
affordable, reliable energy for all Americans,”
    “With a transparent price on carbon and innovation, we can
make measurable climate progress within this decade without
hurting America’s middle class, jeopardizing U.S. national
security, and undermining economic recovery. We are focused on
working with Congress and the administration on effective
government policies, while accelerating industry initiatives and
innovation as outlined in API’s Climate Action Framework.”
    
    SARAH GORDON, CEO OF THE IMPACT INVESTING INSTITUTE
    “The Impact Investing Institute strongly welcomes the
announcements of leading nations at US President Biden’s Climate
Summit to cut emissions more quickly, while supporting climate
finance and creating green jobs globally.
    "It is vital that policymakers continue to recognise the
role that private finance can play in tackling climate change
and delivering social renewal at home and abroad. This includes
facilitating investment in climate-vulnerable countries as well
as promoting a prosperous, green economy for all."
    
    GILLES MOËC, CHIEF ECONOMIST AT AXA INVESTMENT MANAGERS
    "The US clearly wants to assert some leadership on the green
transition, and the statement yesterday shows the intent to do
so. The US probably sees China as its main competitor on this,
as on many other issues, after Beijing’s unexpected pledge last
year to reach “net zero” by 2060. 
    "However, on the regulatory aspects, and especially on green
finance, the real competitor may well be the European Union.
    "Biden’s main problem in trying to take global leadership on
this essential matter is that the US track record is far from
unblemished – including at times when the Democrats dominated
the policy stance in Washington DC. 
    "The Obama-Biden administration, for example, failed to get
a comprehensive carbon “cap and trade” framework through in
2010. It had been supported in the House but could not reach a
majority in the Senate although the Democrats held a 9-seat
majority."

 (Reporting by Simon Jessop and Ross Kerber, editing by Louise
Heavens)
 ((simon.jessop@thomsonreuters.com; +44 (0) 207 542 5052;
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