Donald J. Trump has often ridiculed global warming and promised to withdraw the US from the global accord signed in Paris in 2015.
Yet, despite the change of political weather in Washington, the captains of business and finance gathered in Davos this week will spend a lot of time talking about climate change—and how to make money from it.
The World Economic Forum (WEF) is devoting 15 sessions of its 2017 annual meeting to climate change, and nine more to clean energy—the most ever on the issues.
It reflects how much is at stake. For global business leaders, it’s not just a question of burnishing their green credentials, but about billions of dollars—maybe even trillions—in potential profits and losses.
Insurers are starting to price-in more frequent flooding and droughts; energy giants are shaping their business for a world that’s moving away from oil and coal; carmakers are putting real money into electric vehicles; banks want to lend money for renewable electricity projects.
“The good thing is that the Paris agreement raised the bar for everyone,” said Ben van Beurden, the head of Royal Dutch Shell Plc., Europe’s largest oil group. “Everybody feels the obligation to act.”
Achieving the ambitions set out in Paris may require $13.5 trillion of spending through to 2030, according to International Energy Agency data that shows the scale of the opportunity for business.
Only last year, clean-energy investment stood at $287.5 billion, data compiled by Bloomberg New Energy Finance indicate.
“The scale and scope of the investment flows on renewables shows it’s mainstream,” said David Turk, head of climate change at the IEA in Paris and a former senior US climate diplomat.
Opportunities rising
With money-making opportunities rising, traditional climate-change advocates—Al Gore and Greenpeace executive director Jennifer Morgan—will mingle in panel discussions with executives, such as HSBC Holdings Plc. Chairman Stuart Gulliver and Patrick Yu, president of Cofco Corp., the largest food company in China. They will discuss the nexus between the fight against global warming and business—both how to stop climate change and how to profit from it.
“Climate change is material and central for many companies and their boards,” said Dominic Waughray, head of public-private partnership at the World Economic Forum. “Climate change is a core part of the growth agenda.”
Beyond the official program, a record 60 CEOs are expected to gather in a closed-door session to discuss the challenges of climate change, according to a person familiar with the event, who asked not to be named because the meeting isn’t public.
In the Alpine resort’s congress center, the World Economic Forum has built an exhibition highlighting climate change, “from rampant emissions to rising sea levels.”
Global fight
Michael Oppenheimer, a professor at Princeton University who will help to explain the exhibit, said despite the arrival of Trump, the fight against global warming will continue.
“No matter what the US president says, the progress on climate change can have many routes,” he said. “The US can harm progress, but will not stop progress.”
Last November’s follow-up meeting to Paris, nearly 200 nations, including China and Saudi Arabia, vowed to step up their efforts to fight global warming, facing down concerns the new Trump administration will seek to derail policies aimed at curbing pollution.
“Leadership on climate change is proving to be remarkably resilient,” said Christiana Figueres, the UN’s former top climate change diplomat, who will be in Davos speaking on a panel alongside Patrick Pouyanne, boss of French oil giant Total SA, Oleg Deripaska, owner of world’s top aluminum producer United Co. Rusal, and Ignacio Sanchez Galan, head of renewables heavyweight Iberdrola SA.
China flip
China, which for years sought to derail global efforts to tackle climate change, has flipped its role and is now lecturing the US and Europe on the importance of the issue. Xi Jinping will be the first sitting Chinese president to attend Davos, after making green finance a key topic for China’s presidency of the Group of 20 nations last year.
In 2012 Trump claimed climate change was a Chinese hoax designed to damage the US economy. Even though the president-elect has appeared to soften his stance a little, telling the New York Times last year he was open minded about the issue, his policy positions stand in stark contrast to China.
Trumps’s election platform pledged to reverse environmental regulations, increase coal production and pull the US out of the landmark Paris Agreement signed in 2015 to limit fossil-fuel emissions.
Yet, more than 600 US companies from DuPont Co. to Monsanto Co. have urged Trump to stay in the Paris accord.
“It’s totally clear that companies see the writing on the wall,” said Morgan of Greenpeace. “If President-elect Trump doesn’t want to go, there then he is going to be very out of step.”
Trump team shunning Davos
Trump won’t send an official representative to the annual gathering of the world’s economic elite in Davos, although one of the president-elect’s advisers is slated to attend.
Former Goldman Sachs President Gary Cohn, a regular attendee in the past, told the group he would skip 2017 after being named in December to head the National Economic Council, said people familiar with the conference. Other top Trump appointees will also pass up the forum.
A senior member of Trump’s transition team said the president-elect thought it would betray his populist-fueled movement to have a presence at the high-powered annual gathering in the Swiss Alps.
The gathering of millionaires, billionaires, political leaders and celebrities represents the power structure that fueled the populist anger that helped Trump win the election, said the person, who asked for anonymity to discuss the matter.
Hedge fund manager Anthony Scaramucci is planning to travel to Davos, though. The founder of SkyBridge Capital and an early backer of Trump’s campaign, Scaramucci was named on Thursday as an assistant to the president.
Trump advisers
Scaramucci, who has attended the forum several times, made plans before being selected for the White House team and is traveling in an unofficial capacity, Trump Spokesman Hope Hicks said.
The forum schedule lists him on a January 17 panel that will cover “the priorities, challenges and opportunities for the incoming government of the United States,” and identifies him as an executive member of Trump’s transition team.
“Anthony Scaramucci has been a long-standing participant at the annual meeting, and as such has been registered to attend since last spring,” Paul Smyke, head of the North America World Economic Forum, said in a statement. Scaramucci will depart in time to attend Trump’s swearing-in on January 20.
Political adviser Rebekah Mercer is also registered to attend. A major Republican donor, Mercer is a member of Trump’s transition team and has been influential in helping to hire senior staff, but doesn’t have an official role in the incoming administration.
During the campaign Trump labeled his opponent, Democrat Hillary Clinton, as “a globalist” and portrayed himself as a champion for the working class fighting an unfair economic system. Since the election, Trump, who will be the nation’s first billionaire president, has nominated for his Cabinet two billionaires and about a dozen millionaires.
Many in the upper ranks of his administration are from the world of finance, including several who have worked for or who have ties to Goldman Sachs, the investment bank singled out for criticism during the Republican’s campaign.
Economic inequality
A study by the World Economic Forum released ahead of the Davos gathering concluded that the weak economic recovery following the global financial crisis of 2008-2009 has widened the gap between rich and poor, fueling a sense of “economic malaise” that’s led to the rise of populist parties.
While the Trump team stays away, Xi Jinping is set to become the first Chinese president to attend the forum, bringing with him a contingent of China’s wealthiest executives. China is casting itself as an advocate of globalization, in contrast to Trump’s “America First” platform critical of free-trade deals.
Xi will join about 3,000 others, who will include UK Prime Minister Theresa May, outgoing US Vice President Joe Biden and South African President Jacob Zuma. Past attendees include singer and philanthropist Bono of U2, and actor Leonardo DiCaprio. The forum wraps up on Trump’s Inauguration Day. WEF founder Klaus Schwab met with members of Trump’s staff in December. Bloomberg News
Image credits: Bloomberg News