President Trump's decision to pull the US out of the Paris agreement has been widely criticised, amid fears it could dent progress on climate change action.
The accord reached by 195 countries in December 2015 to limit global temperatures to well below 2 degrees, was seen as a milestone towards reducing the impact of global warming.
It also led to a realisation among pension funds that they could not ignore financial risks faced by climate change.
Given that America is the world's second largest emitter of carbon dioxide, its withdrawal could have major implications for global action, with the potential for other countries to follow suit.
However, there is widespread agreement that this move does not change much for pension funds.
The move was condemned by the UK Sustainable Investment and Finance Association, whose members feature some of the biggest UK asset managers and pension funds including the BT Pension Scheme, Church of England Pensions Board, HSBC Bank Pensions Trust, and the Local Authority Pension Fund Forum.
The association's chief executive officer (CEO) Simon Howard said: "Our memberships are united in condemning this action by the US Government. Climate change is the gravest threat to mankind's future and the Paris Agreement is the best hope for global mitigation. By withdrawing from the Paris Agreement, President Trump will slow progress, but will not stop it.
"Our members will continue to address climate change and other climate related issues through the investment process and through actions with other key stakeholders. Such actions were exemplified on 31 May when investors forced through a motion on climate change at ExxonMobil, getting 62% of the vote."
ShareAction campaigns manager Juliet Phillips said the US's "short-sighted decision" does not change the "very real financial risks" that climate change poses to pension portfolios.
"Regardless, the UK is committed to the global accord and bound by targets under the Climate Change Act," she said.
The Pensions Regulator's guidance makes it clear schemes should be considering all financially material risks, which can include climate change.
"The momentum towards the low-carbon economy, supported by the private sector and governments, is such that progress cannot be derailed by this move which surrenders the US's leadership," Phillips added.
"Trump is failing to act in the interests of his citizens and pension funds would be doing the same if they followed him down this destructive path."
The move was also criticized by the US's second largest public pension fund, the California State Teachers' Retirement System (CalSTRS).
Its CEO Jack Ehnes said: "Despite recent federal actions to withdraw the US from the Paris Climate Change Agreement, CalSTRS remains steadfastly focused on our commitment to advancing long-term sustainability on a global scale."
He said the fund acknowledges that environmental risks, both current and those projected over the next 10 to 25 years, must be considered as part of its fiduciary responsibility.
"These risks represent a potential material impact, and they warrant mitigating strategies that are driven by active shareholders, like CalSTRS, to hold portfolio companies accountable for their actions and to propel them forward through positive change."
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