June 6, 2025

With his return to the White House in January, President Donald Trump wasted no time reasserting his “America First Energy” doctrine. But unlike his first term, where deregulation was met with a steady rise in voluntary corporate climate action, this second term is shaping up to be a more sustained—and more disruptive—challenge for companies trying to balance profit, reputation, and decarbonization.

In the span of just a month, a series of aggressive federal rollbacks, symbolic deregulatory gestures, and quietly transformative fiscal changes have shifted the center of gravity for American corporate sustainability efforts, prompting sharply divergent responses from corporate America. No longer governed by a unifying federal climate policy, firms now find themselves in a choose-your-own-regulation era, where climate ambition reflects not legal obligation but a mix of strategic calculus, reputational risk, investor expectation, and operational necessity.

Fossil Fuels Rejoice

Predictably, oil, gas, and petrochemical firms have welcomed the administration’s deregulation with open arms. Chevron and ExxonMobil have both paused their voluntary methane emissions reductions initiatives, which were launched under investor pressure in 2022. At the recent CERAWeek energy summit in Houston, executives made it clear: carbon capture, hydrogen, and renewables would remain “on the shelf” unless subsidies return or international regulations compel action.

The coal sector, long in decline, sees a narrow window for revival. Peabody Energy and Arch Resources have already filed proposals to expand mining capacity in the Powder River Basin. Industry executives have celebrated the new 28-day permitting timeline as “historic,” even as environmental groups warn it will provoke a regulatory backlash from states.

Sustainability Remains a Brand Equity Play for Consumer & Tech

In stark contrast, many companies with high public visibility or global operations are holding fast to their climate goals—and in some cases, even accelerating them. Microsoft, Google, Apple, and Amazon remain committed to their net-zero timelines and internal carbon pricing frameworks. For them, environmental credibility is not just a virtue but a competitive necessity, especially in talent recruitment and international market access.

Microsoft, for example, has continued to publish detailed climate impact reports and is investing heavily in AI-powered emissions monitoring tools. “We are building for a regulatory world that already exists outside the U.S.,” said its Chief Sustainability Officer in a recent shareholder meeting.

Brands like Patagonia, Ben & Jerry’s, and Nike have also leaned in, joining a new “Climate Compact” of consumer-facing companies pledging science-based targets and independent verification regardless of U.S. federal policy. Of course, it's unclear whether this behavior is value-driven, or if it's simply a calculated marketing strategy aimed at young consumers. Either way, the noise they're making is critical to ensuring ESG does not fall from the public discourse.

The Financial Sector Quietly Continues ESG

Banks, asset managers, and insurers occupy a more cautious middle ground. While many maintain internal sustainability goals, they are increasingly distancing themselves from public-facing ESG commitments amid growing political scrutiny.

In recent earnings calls, executives from JPMorgan and Bank of America referenced “client risk appetite” more than climate alignment. Several firms have scaled back their ESG teams, rebranded sustainability reports as “risk disclosures,” and dropped references to DEI entirely. In Texas and Florida, Republican legislators have proposed laws to bar state funds from institutions they deem “hostile” to fossil fuel interests—further chilling overt ESG activity.

Yet under the surface, the integration of climate risk into credit modeling, underwriting, and investment screens continues—albeit more discreetly. “The label may change,” said one investment officer at a top-tier fund, “but the fundamentals haven’t.”

Stuck in the cross-currents

For companies without global exposure or major institutional shareholders, the current landscape is less ideological and more pragmatic. Many are recalibrating sustainability programs as cost centers rather than strategic priorities. Internal carbon accounting tools have been shelved. ESG reporting functions have been folded into general compliance. Diversity initiatives have quietly withered.

These shifts are especially pronounced in sectors like manufacturing, logistics, and retail—industries where margins are thin and political attention is intense. Anecdotal reports from sustainability consultants suggest a marked drop in ESG RFPs (requests for proposals) from U.S.-based companies since February.

However, companies with operations in climate-forward states such as California, Massachusetts, and Washington are maintaining compliance with state-level emissions laws and disclosure mandates, sometimes grudgingly. This patchwork compliance has given rise to what one legal analyst dubbed the “federalism premium”—the additional cost firms incur to stay above water in the nation’s most regulated regions.

This article was published with the help of AI.