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You Are the Company You Keep

PHOTO CREDIT: Presidencia de la República Mexicana

He that walketh with wise men shall be wise: but a companion of fools shall be destroyed.

Proverbs 13:20

President Donald Trump is expected to announce any day now, whether or not he will pull the United States out of the Paris climate agreement. While the world anxiously waited for his decision today, there were two loud statements encouraging Trump keep the US commitment to the agreement.

The first was in the form of a non-binding shareholder vote at ExxonMobil's annual meeting in favor of encouraging the company to "analyze the impacts on ExxonMobil's oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree [Celsius] target." The resolution passed with 62.3 percent support, well above the 38 percent approval from a similarly worded resolution at last year's meeting, and in defiance to ExxonMobil management which had been against the resolution. It would appear that Vanguard, along with BlackRock and State Street, two other large shareholders, voted in favor of the resolution. It should be noted that all exposure to ExxonMobil shares in AlphaGlider strategies is held in Vanguard exchange-traded funds (ETFs).1

The second was a threat by Elon Musk, founder and CEO of Tesla Motors and SpaceX, to quit the President's business advisory council if Trump pulls the US out of the agreement. He indicated that he had done all that he could do to convince Trump to stay in the agreement through direct communiciation, and indirectly through Trump's White House staff and councils.

These two statements come on the chorus of pressure to remain in the agreement from G7 leaders and the Pope this past weekend. And as I noted in a blog three weeks ago, companies from all over the world have also encouraged Trump to remain over months.

Right now only two countries are not party to the Paris climate agreement, Syria and Nicaragua. Is this the company Americans want to keep?

Source: The Washington Post


1Mutual funds, exchange-traded funds and exchange-traded notes are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained directly from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.