The Impact & Implications of Trump’s stance on ESG and Sustainability
Christopher Oare Aneni, PMP??
Sustainability Project Manager | Utilizing community engagement to develop environmentally sustainable projects. Business Operations | Continuous Improvement | Program Management
Challenges and Uncertainties for Future Corporate Responsibility
In the last perhaps 15 years, Environmental, Social and Governance (ESG) initiatives have become an integral part of the business strategy of many multinational corporations. I have written several times about the future of sustainability in our current world, the impact of practicing it across our organizations, and the absolute need for a sustainable approach to every single project. My articles have been a dull reflection of brilliant initiatives put together by the top organizations in the world like Meta and Google and Amazon, charting a steady approach to improving our environment and ensuring our progress. However, in recent weeks the introduction and revocation of several policies by President Donald Trump of the USA pose significant challenges to the progress that has been made in this area.
This article is not a political one, and I simply aim to examine and comment on the potential impact of these policies on ESG initiatives (especially those concerning sustainability, climate change and global warming), and what the future may look like in the next few years.
Trump’s Policies
The world has always been aware of Mr. Donald Trump’s stance on sustainability and climate change, but I, like a lot of people, assumed his stance was merely rhetorical. The activities since January 20, 2025 have proven that amongst many things, he is a man of his often spoken word.
U.S. Withdrawal from the Paris Agreement
While the intent of this decision is described as “putting America first”, it signals a return to those smog-filled early 2000s when the U.S. was not bothered about ensuring native corporations adhered to global climate change commitments, and everyone was just, to borrow Nigerian parlance: “doing wetin dem like”. Also, as America is a leader in global geopolitics, this may also have the butterfly effect of having several other nations withdraw as well.
Halting Electric Vehicle (EV) Infrastructure Funding
EV adoption in the U.S. was being fast-tracked by the availability of charging stations, made possible through federal funds. It increased customer confidence in the product and assuaged investor fears. Cutting off those funds will definitely slow down any expansion in this sector.
Reversing Climate and Diversity Policies
Perhaps the most telling shift of them all has been the dismantling of diversity, equity, and inclusion (DEI) initiatives across federal agencies and the removal of all references to climate change and sustainability-related statements from government platforms, and apparently their contractors as well.
The immediate implications
Leading the charge for ESG and sustainability all these years have been the tech giants. However, in the last few weeks we have seen Google announce a discontinuation of its DEI hiring targets, Amazon has removed references to diversity from its annual reports etc. These actions seem to suggest that these giants are, even if not capitulating, but certainly adjusting their policies in response to the new climate (sic).
Again, since these companies have been the SI unit for sustainability, this indicates a possible trend of other multinational corporations adjusting their ESG policies in line with the US federal directives and current mission. In fact, Google had indicated that its reason for its changed stance on DEI hires is due to its status as a federal contractor. I wonder how many other global companies are U.S. contractors and what this means for them.
While on that interesting bit, a critical question arises: how will U.S.-based companies with significant operations in the E.U. and Asia Pacific navigate conflicting regulations? Will they be forced to establish special purpose vehicles for the sake of marching along to Trump’s drum, while maintaining compliance with the more stringent E.U. and Asian (China, South Korea etc.) ESG regulations? However when they are in Africa, what would they do? Does anyone care?
And then the energy giants who for years have chafed under the strictures of the ESG requirements imposed on them by the global community (led by the U.S.); what would they do now? Already these companies deal with significant cost impacts from complying with environmental regulations. Will this deregulation mean they can now soft-pedal with regard to those environmental concerns, ease off on green technologies etc.?
领英推荐
Maybe.
ESG is going to have to adapt
ESG is not driven by policy alone
It is essential to recognize that the momentum behind ESG initiatives is driven by more than just government regulations. Consumer demand, investor expectations, and global trends towards sustainability are powerful forces, perhaps even more powerful than mere regulations. And these may continue to drive corporate responsibility efforts. Perhaps this will increase the incidences of greenwashing in fledgling corporations, especially since there will now be reduced government oversight but that is something we will have to watch and see.
Then there is the matter of the balance sheet, and nothing drives a corporate effort like the balance sheet. Jasper Brodin, IKEA’s CEO, while presenting at the WEF held in Davos a few weeks ago outlined very clearly the direct correlation between emission reduction and revenue growth, confirming that sustainability is now more than a footnote in business strategy discussions.
Supply Chain risks have not disappeared
Federal mandates may come and go but supply chain disruptions due to climate related risks remain a pressing concern. Insurance costs, extreme weather events, and global supplier expectations will ensure that ESG considerations will not disappear from corporate strategies.
Corporate Messaging will shift
To align with the current political climate while maintaining ESG principles, some multinationals may need to rebrand their sustainability efforts. Instead of framing initiatives under “climate change” or “ESG,” they could borrow terminologies out of the green project manager’s lexicon:
Etc.
Conclusion
The new Trump policies present a formidable obstacle to the advancement of ESG initiatives, it’s true. However, while some companies, especially the USA-based, may roll back their efforts in response to these changes, the broader movement towards corporate responsibility is likely to persist. The benefits of ESG have been proven, with impacts as much as 30% growth to company revenue. The investors and CEOs of global corporations are not going to ignore such numbers. Sustainability is no longer a footnote, it’s on the cover of the book and right there in between the lines. Like Torsten Lichtenau, who leads the Carbon Transition practice at Bain & Company, has been quoted as saying: “I think the time of sustainability strategy is over, it’s about business strategy with sustainability embedded in it.”?And that’s fact.
References
?