As BlackRock Inc. Chief Executive and founder Larry Fink put it recently, “Climate risk is investment risk.”
How to address this basic truth is the stark challenge now facing business leaders across America, including the thousands of executives, investors and entrepreneurs who are members of our organizations.
Unfortunately, instead of helping businesses address the threats from climate change, the Trump administration recently proposed rollbacks to a bedrock environmental policy — the National Environmental Protection Act — that will instead increase risks.
Get the latest global energy news and analysis delivered to your inbox every morning.
NEPA is a landmark environmental law that has been in place since 1970, when Congress approved it with strong bipartisan support and President Richard Nixon signed it into law. Under NEPA, the government is required to consider the environmental and economic impacts of major projects it funds or approves.
The administration is now attempting to eliminate this requirement, along with the requirement that agencies account for climate-related impacts as part of their assessments. Less-informed decision-making is rarely a good idea, and this is no exception.
We need federal leadership to guide climate-smart investments and projects. Instead, the Trump administration is proposing to turn a blind eye to the potential negative climate impacts of future projects, which will undermine businesses.
Ignoring climate impacts when assessing projects will undercut more responsible and better-planned proposals. As a result, it will hurt those that are balancing profitability and climate risk.
Furthermore, the National Environmental Protection Act is critical to ensuring that our infrastructure is ready to stand up to the impacts of climate change. A highway that is underwater because the government chose not to consider the climate implications of where it was built will directly impact workers, supply chains, consumers and market access. This is a concern for all enterprises that rely on sound roads, ports and bridges, not to mention broadband infrastructure and countless other business-related federal decisions.
With the full suite of rollbacks, the Trump administration is taking the rulebook that investors and companies have followed for a half-century and carelessly ripping out the pages that matter the most. NEPA currently has 50 years of legal precedence that will get suddenly washed away as if by hurricane-borne floodwaters — inviting years of confusion and litigation that will lead to uncertainty for companies across the country.
Businesses depend on certainty, and curtailing the environmental review process NEPA provides would multiply uncertainty for all of them. This in turn would harm companies’ ability to plan for the future and, ultimately, the economy. At a time when many in the private sector — including the private-financing, insurance and investment sectors — are moving to ensure their decision-making is driven by the economic realities of the climate crisis, this is yet another indication that the current administration is out of step with the needs of corporate America.
Businesses cannot afford the consequences of rolling back the National Environmental Protection Act — and neither can our economy. We strongly urge the White House to change course and withdraw its egregious proposal to undermine NEPA.
Anne L. Kelly is the vice president of government relations at CERES and leads Ceres Policy Network, Business for Innovative Climate and Energy Policy.
Sandra Purohit is the federal advocacy director for E2 (Environmental Entrepreneurs).
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.