Anthony Hobley, CEO of the Carbon Tracker Initiative, said:

“The abandonment of the Paris Agreement by the Trump administration is an economic and leadership failure of monumental proportions and will sadly cast the U.S. on the wrong side of history.

“Nevertheless, the rest of the world and key parts of the US economy, such as California, will get on with implementation regardless.

“Our financial analysis shows beyond doubt that the low carbon transition underway is driven by unstoppable technological change and innovation. New energy generation from renewables has overtaken new generation from coal. In the United States alone solar jobs grew 25% last year, more than in the oil, gas and coal sectors.

“Electric vehicles are the new growth segment of the auto-industry, with manufactures racing to bring models to market. Jobs are being created in clean sectors faster than any other. These technologies, with ever-improving economics will continue to take centre stage, regardless of any backward looking ideological motivations.

“This is the case in the US and every other major economy, and the entry into force of the Paris Agreement underscored the scale of that commitment. It is now a question of when we will achieve the transition, not if: China and India are already on track to meet or even surpass their climate pledges.

“Perhaps this shock will serve to galvanise the world to even greater efforts. As California Governor Jerry Brown says, sometimes it takes a heart attack to stop you smoking! Our assessment is that this move will not stop the low carbon transition. However, it may give fossil fuel companies and some investors a false sense of security, if they double down on existing strategies, instead of adapting to the rapid ongoing shift: our latest work has shown that coal and oil demand might peak as early as 2020. Despite the US withdrawal, the policy and technology signals are numerous; misreading them could prove disruptive to financial markets.

“This increases the need for financial institutions and shareholders to act to protect their investments, both through core investment decisions and through direct engagement with the companies held.

“The extraordinary shareholder result on climate risk at Exxon and the recent successful resolution asking Occidental to assess the risk of climate and energy transition to its business model shows that shareholders understand the need to ensure the companies they own are managing transition risk.”