Though unsurprising, the United States’ decision to withdraw from the Paris Climate Accord has stirred second thoughts in other nations and prompted shifts within financial institutions and corporate boardrooms worldwide.
So far, the European Union and China remain strong supporters of the Paris Climate Accord. “Europe will stay the course and keep working with all nations that want to protect nature and stop global warming,” said Ursula von der Leyen, European Commission president.
China, the world’s largest greenhouse gas emitter, calls itself “a doer” in response to climate change. China is sticking with its two pledged carbon goals: It will reach peak carbon emissions by 2030 and net zero emissions by 2060. China is also the world leader in wind, solar and enabling fast market penetration for electric vehicles.
Increasingly, China’s energy transition is not only driven by climate change but by its own energy security, self-reliance and costs. China officially expressed “concern” over the United States’ withdrawal from the Paris Climate Accord, however, some analysts think that China might not mind the move: China could increase its political and technological influence within clean energy and create closer ties with the Europeans.
Japan’s Environment Minister Keiichiro Asao expressed “regret” over Trump’s decision. He added that climate change “is a common challenge for humanity that cannot be postponed.” Japan will “continue to work on climate change measures without wavering and contribute to the decarbonization of the world through our country’s experience and technology.”
Brazil also remains a strong supporter of climate initiatives. The nation will host the COP30 meeting in November. “We are still analyzing President Trump’s announcements, but there is no doubt they will have a significant impact on preparation for COP30,” said head of the COP30 Planning Committee André Aranha Corrêa do Lago.
Wavering Support
Argentinian President Javier Milei has openly stated that Argentina is evaluating whether to exit the Paris Climate Accord. There are press reports that Argentinian government officials have been studying an internal document recommending an exit. Argentina previously withdrew its negotiators from COP29 in Azerbaijan in November 2024.
Milei does not believe that humans are the cause of climate change and is reportedly leaning toward exiting the Agreement. During his speech at the World Economic Forum 2025, Milei said “Wokism also manifests in sinister radical environmentalism and the climate change agenda.” Argentina already exited the World Health Organization in February, following the United States’ decision to do the same.
Unlike in the United States, Argentina requires congressional approval to withdraw from the Paris Climate Accord. Additionally, Argentina might not receive billions in energy transition-related funding if it decides to leave the Paris Climate Accord.
A senior official in Indonesia, the world’s sixth-largest greenhouse gas emitter, also expressed doubt about the Paris Agreement’s effectiveness. He said, “This is a matter of justice. Indonesia [emits] three tons [of CO2 per capita], America 13 tons … Where is the justice in that?” The official also thinks that Trump’s withdrawal means Indonesia will not likely receive the $20 billion previously promised to help phase out its coal plants.
Indonesia plans to phase out coal by 2040, but finances are a challenge. Indonesia is estimated to need $1.2 trillion from now until 2050 to meet its needs for clean energy, storage and transmission networks. It would need $28 billion just to retire coal plants early.
Corporate and Financial Reactions
Large companies base their investments on long-term outcomes, especially in oil and gas. Recognizing climate change and leveraging strengths in preparation for the energy transition has been the common approach among industry leaders. Darren Woods, CEO of ExxonMobil, even appealed publicly to President Trump not to withdraw from the Paris Climate Accord.
European companies, including BP, Shell and even global offshore wind leader Ørsted reduced investments in renewable energies before Trump was re-elected. BP and Shell, for example, are focusing on oil and gas investments to achieve higher financial returns, reflecting a lower prioritization of climate concerns, not a change of mind.
Financial institutions have also recently downplayed environmental, social and governance investing criteria, which are under higher scrutiny from Republican policymakers. Six of America’s biggest banks – Citigroup, Bank of America, Morgan Stanley, Wells Fargo, Goldman Sachs and JP Morgan – have withdrawn from the United Nations-sponsored Net Zero Banking Alliance since December 2024. Activist investor Elliott Management has also recently acquired significant holdings of BP shares to further force management back to oil and gas investment.
Despite these developing corporate and national shifts, Simon Stiell, the United Nations’ executive secretary of the Climate Change Secretariat said, “The clean energy shift is now unstoppable because of the colossal scale of economic opportunity it presents.” According to Stiell, more than 2 trillion dollars were invested in clean energy and infrastructure in 2024 – twice as much as in the fossil fuel industry. He added that the energy transition is no longer just to combat climate change, but represents “massive rewards: stronger economic growth, more jobs, less pollution, far lower health costs and more secure and affordable energy.”
Will other countries follow Trump’s lead? How will companies and financial institutions adjust their strategy in response to Trump 2.0?