A Second US Exit From the Paris Agreement

On January 27, 2026, the United States formally exited the Paris Agreement for the second time under President Trump. This decision marked another major shift in federal climate positioning and raised immediate questions for businesses, investors, and global partners. Chief among them is whether carbon disclosure will remain relevant in a world where the US federal government has once again stepped back from international climate commitments.

For companies operating across borders, the answer is increasingly clear. Carbon disclosure has moved beyond being a policy-driven exercise and has become embedded in market access, regulatory compliance, and financial decision-making. While the Paris Agreement sets an international framework, the practical forces shaping corporate behavior today are global regulations, subnational policies, and investor and buyer expectations. These forces continue to advance regardless of changes in US federal leadership.

This article examines why carbon disclosure remains unavoidable in 2026, even after the US exit from the Paris Agreement, with a focus on global markets, non-US regulations, investor pressure, and the growing role of state-level climate initiatives.

Global Regulations Are Advancing Without US Federal Leadership

Outside the United States, climate regulation continues to accelerate and increasingly shapes the requirements placed on multinational companies. One of the most consequential developments is the European Union’s Carbon Border Adjustment Mechanism. CBAM directly links trade access to emissions data by requiring importers of carbon-intensive goods to report and eventually pay for embedded emissions.

Key elements of CBAM include:

• Who is covered and scope of coverage: Companies exporting carbon-intensive goods into the European Union, including non-EU companies, with obligations tied to embedded emissions in imported products
• Emissions reporting requirements: Mandatory disclosure of embedded Scope 1 and Scope 2 emissions for covered goods

At the same time, the International Sustainability Standards Board (ISSB) has established a global baseline for climate-related financial disclosure. ISSB standards are being adopted or referenced by regulators across Europe, Asia-Pacific, and emerging markets. Even where local adoption varies, investors are increasingly using ISSB-aligned data to compare companies across jurisdictions. This creates a de facto global expectation for consistent and auditable carbon disclosure.

For companies with international operations, suppliers, or customers, these developments mean that US federal withdrawal from Paris does not reduce compliance obligations. Market access, regulatory approval, and commercial relationships increasingly require emissions transparency. Carbon disclosure is becoming a prerequisite for participation in global trade rather than a voluntary alignment with international agreements.

State-Level Climate Action Is Reshaping Compliance Obligations

Within the United States, state and regional initiatives are playing an expanding role in climate governance. Under California’s SB253, climate disclosure obligations apply not only to companies headquartered in the state but also to companies that meet the definition of doing business in California. This includes firms that generate sales in California, maintain property or payroll in the state, or engage in transactions for financial gain within its borders, even if their headquarters and primary operations are located elsewhere.

Key elements of SB253 include:

• Who is covered and revenue threshold: Public and private companies doing business in California with more than $1 billion in annual global revenue, regardless of headquarters location
• Emissions disclosure requirements: Scope 1 and Scope 2 emissions for the 2025 fiscal year, reported beginning in 2026, followed by Scope 3 emissions in later reporting cycles

For large corporations, California often represents a significant share of total US revenue. As a result, SB253 effectively functions as a national disclosure standard for many enterprises, including those headquartered outside the state.

Beyond California, regional initiatives such as the Regional Greenhouse Gas Initiative continue to influence corporate emissions strategies. RGGI covers multiple northeastern US states and places a cap on power sector emissions, creating carbon pricing signals that affect utilities, energy buyers, and corporate electricity procurement decisions.

Key elements of RGGI include:

• Who is affected and geographic scope: Power generators operating in participating northeastern states, with indirect impacts on corporate electricity buyers across regional energy markets
• Emissions and cost signal: A cap-and-trade system that prices carbon emissions from the power sector, influencing electricity prices and long-term power procurement strategies

Together, these subnational actions create a fragmented but increasingly comprehensive climate policy landscape. Companies operating across multiple states must navigate overlapping requirements, making robust and standardized carbon disclosure systems a practical necessity rather than a regulatory burden tied to any single jurisdiction.

Investor and Buyer Pressure Is Driving Disclosure Across Value Chains

Financial markets remain one of the strongest forces sustaining the relevance of carbon disclosure in 2026. Institutional investors, asset managers, and pension funds continue to integrate climate data into risk assessments and capital allocation decisions. Physical climate risks, transition risks, and regulatory exposure all rely on emissions data that can be compared and verified.

Lenders and insurers are also tightening their expectations. Carbon disclosure increasingly influences loan terms, insurance coverage, and risk premiums. For companies seeking capital or long-term financing, transparent emissions reporting has become part of financial due diligence.

At the same time, buyer requirements are cascading through global value chains. Large multinational companies are demanding emissions data from suppliers to meet their own Scope 3 reporting obligations. These requirements are often aligned with global standards rather than US federal policy. Suppliers that cannot provide credible emissions data face growing risks of exclusion from procurement processes.

This dynamic reinforces carbon disclosure as a commercial necessity. Companies are not reporting emissions solely to satisfy regulators but to remain competitive in supply chains shaped by global customers and investors.

Conclusion: Carbon Disclosure as Permanent Market Infrastructure

The second US exit from the Paris Agreement underscores the volatility of federal climate policy. However, it does not reverse the structural forces that have embedded carbon disclosure into global markets. International regulations, state-level initiatives, investor expectations, and buyer requirements continue to move in the same direction.

For companies, the implication is clear. Carbon disclosure is no longer dependent on participation in a single international agreement. It has become part of the infrastructure of modern business, shaping access to markets, capital, and supply chains. Political cycles may shift, but the demand for credible emissions data continues to grow.

In this context, companies that invest in robust carbon measurement and disclosure are better positioned to manage risk, maintain market access, and compete globally, regardless of changes in US federal climate policy.

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