President Trump announced yesterday he will withdraw the U.S. from the Paris agreement on climate change. That’s nothing new for a Republican president—George W. Bush steered clear of the Kyoto Protocol. But what’s changed in the last decade is the position of business. This time, a long list of CEOs urged the President to stay in the agreement. That not only included the left coast crowd—Apple CEO Tim Cook called the White House to lobby Trump, and Tesla’s Elon Musk quit the President’s advisory council after the announcement (as did Disney’s Robert Iger)—but also the likes of ExxonMobil CEO Darren Woods. GE’s Jeff Immelt and JP Morgan’s Jamie Dimon also dissented, while Goldman Sachs’s Lloyd Blankfein pointedly chose the President’s favorite medium, Twitter, to slam the decision (it was Blankfein’s first tweet since he joined the network six years ago).
Today's decision is a setback for the environment and for the U.S.'s leadership position in the world. #ParisAgreement
— Lloyd Blankfein (@lloydblankfein) June 1, 2017
Nick Akins, the head of American Electric Power—long one of the nation’s top coal consumers—typifies the change in business attitudes on climate change. In an interview with Fortune’s Susie Gharib, he argued that the U.S. should stay engaged in global climate agreements, and said Trump’s talk of reviving the coal industry was not realistic.
“We are going to stay on the path that we are on” toward reduced coal use, Akins said. “We get a lot of questions from investors, we get a lot of questions from customers, that … want renewable energy solutions, clean energy solutions. And we at AEP want to be as benign to the environment as we can.”
Separately, I received a lot of response to my report Tuesday that a majority of Fortune 500 CEOs recognize that CEO pay “has undermined public support for business,” but still feel it is “fairly set by the marketplace in most cases.” One clever reader cited my own (forgotten) words from a 2006 column, in which I said “there’s something perverse about chief executives who defend their paychecks with surveys of their peers. By doing this, the world’s pre-eminent capitalists revert to a form of CEO socialism: From each according to his ability; to each according to Towers Perrin.”
But former Treasury Secretary Lawrence Summers argues what’s going on here is something broader. “Often bankers who advise CEOs are paid more than they are,” he writes, “and CEOs of top 100 companies who typically serve for only a few years make 4 or 5 times annually what the legions of senior partners in top law or consulting firms make for much of a career… The real challenge for fairness is that markets reward anyone near multibillion dollar decisions.”