MSCI ESG Research has analysed the impact in the short and long term of the US government decision to pull out of the Paris climate treaty, should companies in carbon-heavy sectors such as utilities, energy, materials and industrials decide to follow suit and ditch their own corporate commitments to combating climate change this way.
Ankit Sayani of MSCI ESG Research notes that the impact would be greater should the worse carbon emitters decide to change their long term commitments, as those with long term commitments account for more emissions over time. US constituent companies in the MSCI World index account for half of US company emissions, against 11% for those with shorter term targets, the research suggests.
Thus, if the short-term targets are dropped but long-term ones retained, the impact versus maintaining commitment to the Paris goals would be minimal as compared to a scenario in which all US constituents of the MSCI World index dropped their carbon targets.
Click here to read the research report: Paris withdrawal Will US companies follow suit Two scenarios