Key Takeaways
- Political rollbacks won't erase commitments: The U.S. and EU have trimmed ESG-related policies, but individual states and companies are still pushing forward on their emissions reductions and sustainability goals.
- ESG is not dead—it's leveling up: While some governments and corporations are scaling back ESG commitments, forward-thinking businesses are shifting toward integrating sustainability into core operations for real, measurable results.
- Results overpower empty promises: Companies are moving beyond big talk and embracing practical, results-driven strategies—cleaner supply chains, greener fleets, and daily operational shifts that boost efficiency and cut costs. These real-world wins earn more trust than lofty, long-term pledges ever did.
- ESG is becoming part of everyday business operations: Instead of being a standalone initiative, ESG is increasingly embedded in all parts of the business—in supply chains, product design, and workforce strategies.
- Sustainability remains a competitive advantage: Companies that align ESG efforts with business objectives see benefits in operational efficiency, brand reputation, and long-term resilience.
Environmental, Social, and Governance (ESG) principles, once the hallmark of a responsible business, are now at the heart of a heated debate. Some influential governments and major corporations are rolling back key ESG policies even though consumers, partners, and employees continue to demand corporate accountability. But is ESG on its deathbed? The short answer is no. Although we are witnessing a transition from public climate pledges and regulatory pushes, ESG is not dying. Instead, it is undergoing a strategic evolution that shifts sustainability from headline-making commitments to more integrated, results-driven business strategies. This article will explore the key political shifts that have placed ESG at a crossroads and how businesses are adapting their sustainability strategies for long-term success.
“Whether we're still calling it ESG 10 years from now, does anyone think our employees and customers won't expect some iteration of the same? Companies that ground their commitment in their values, right-size their programs, and find authentic language to articulate their efforts will be the ones that weather the headwinds, make smart use of their resources, and maximize shareholder value.”
Keith Thomajan Former ESG Leader at Dutch Bros Coffee
Global policy shifts and their (lack of?) impact on ESG
US policy shifts
In 2025, the new administration in the United States (U.S.) instituted several policy shifts affecting ESG and Diversity, Equity, and Inclusion (DEI) principles. These include:
Climate policies: Mirroring the stance of the first Trump administration in 2017, the U.S. withdrew once again from the Paris Agreement. However, 24 U.S. states pledged to continue supporting the Agreement, and many states have already established climate policies and net-zero targets. While this fragmented regulatory landscape complicates ESG compliance, companies continue to prioritize emissions reductions and transparency. More than 10,000 companies have reduction targets in place via the Science Based Targets Initiative (SBTi), and 85% of large-cap U.S. companies disclose their greenhouse gas (GHG) emissions. Further signaling corporate commitment, nearly 3,000 businesses have joined “America is All In,” and 77% of U.S.-based CFOs plan to maintain or increase sustainability investments in 2025.
“While the U.S. administration retreats, states, cities, and businesses across the U.S. will continue driving climate action forward.”
Ani Dasgupta President & CEO at World Resources Institute
Energy transition: Trump’s “Unleashing American Energy” initiative promotes energy independence, expands domestic fossil fuel production, and reduces support for clean energy. However, despite this policy shift, the U.S. remains the world’s second-largest investor in clean energy transition. Much of this progress is driven at the state and corporate levels. Seventeen U.S. states have committed to 100% clean or renewable energy targets, and Republican-led states like Texas, Iowa, and Oklahoma now lead the nation in wind power generation.
Solar energy is also surging, with California ranking first, followed by Texas and Florida. Analysts expect 81% of new power generation to come from solar and battery storage in 2025. Renewable energy as a whole—now the second largest power source in the U.S.—is projected to grow by 12%. By contrast, coal is set to decline by 6%. State policies aren’t the only driving force behind this rapid expansion of renewables—it’s also fueled by rising corporate demand. Large buyers, like Meta, Amazon, and Google, are driving record investments in renewables. Google, for instance, recently signed a 12-year deal for U.S. solar energy and Renewable Energy Credits (RECs). In another example, an industry group—including Akamai, Wayfair, Cisco, Biogen, and IDEXX Lab—has signed deals to buy U.S. solar energy. These purchases highlight the important role the private sector is playing in the clean energy transition.
“The U.S. has the companies that are most willing to buy renewable power and a market structure that best enables purchases. That's why it's the number one country for corporate purchases of solar and wind.”
Kyle Harrison Head of Sustainability Research at BloombergNEF
Social responsibility: Federal agencies have been barred from considering ESG or DEI factors in procurement decisions, and companies with federal contracts were ordered to drop DEI and affirmative action programs. In response, several businesses scaled back their DEI programs and targets, sparking consumer boycotts in late February. For instance, Target has seen its profits plummet since earlier this year after drastically scaling back its DEI initiatives. However, some companies, including Apple, Costco, Delta, Microsoft, and Patagonia, stood firm in their commitments.
“DEI is about talent, and that's been our focus. We are steadfast in our commitment because we think they are actually critical to our business.”
Peter Carter Chief External Affairs Officer at Delta
Watered-down climate rules in the EU
Surprisingly, the European Union also proposed to scale back key climate policies, including its Corporate Sustainability Reporting Directive (CSRD). Initially designed to uphold stringent, comprehensive ESG reporting for many companies, the trimmed-down CSRD now applies to fewer businesses, reduces reporting requirements, and postpones deadlines. EU officials say these changes will reduce the administrative burden on companies. They will also help keep the EU competitive.
The EU also eased its Corporate Sustainability Due Diligence Directive (CSDDD) for similar reasons. Despite these rollbacks, EU member states and businesses remain committed to their ESG goals. Twenty EU member states have enacted the original CSRD into law, and several have also implemented their own supply chain due diligence rules. These include Germany (LkSG), France (Loi de Vigilance), Switzerland (VSoTr), and Norway (NTA). In addition, leading multinational corporations—including Unilever, Nestlé, Mars, and a French consortium featuring L'Oréal SA and Carrefour SA—have publicly urged EU policymakers to maintain the original legislation. Key business benefits of the original CSRD include improved environmental performance, stakeholder engagement, and risk mitigation, according to a global PwC survey of executives and senior professionals.
Meanwhile, EU firms continue to show strong ESG leadership irrespective of regulatory changes—73% have developed new, climate-friendly offerings, compared to 54% in the US and 51% in Asia. Moreover, 61% of EU firms invested in tackling climate change in 2024, and 91% implemented measures to reduce GHG emissions. Together, these developments illustrate how EU member states and industry leaders are pushing forward with transparent ESG efforts, even as the original CSRD and CSDDD ambitions are poised for rollback.
“Maintaining [Europe's sustainability] leadership requires firm and consistent application of the CSRD, ensuring that European standards shape global norms rather than ceding control to competing frameworks from the U.S. or Asia. Postponing or diluting these regulations would undermine European competitiveness and give strategic advantages to foreign standards.”
C3D French consortium letter
High-profile corporate exits from ESG alliances
The policy fluctuations in the U.S. and EU are not happening in a vacuum. Major companies are also pulling back from public climate commitments and alliances. Perhaps most striking is the recent wave of financial institutions withdrawing from global alliances such as the Net-Zero Banking Alliance (NZBA). Several big banks from the U.S. and Canada exited NZBA. They did this due to political pressure and a desire to manage climate strategies on their own.
In the past, firms joined net-zero alliances to demonstrate climate leadership and forward-thinking risk management. However, as economic and political pressures mount, many companies are shifting their focus from broad, aspirational pledges to concrete, measurable steps that better align sustainability goals with business realities. At the time of their exits, several banks reiterated their commitment to ESG targets and NZBA’s parent organization, the Glasgow Financial Alliance for Net Zero (GFANZ). For example, a Citi spokesperson stated, “In light of this shift, and Citi’s progress towards its own net zero goals, we have decided to leave the Net Zero Banking Alliance and focus our attention on supporting GFANZ during this new phase.”
While these exits raise concerns about the durability of voluntary corporate commitments, they do not necessarily signal a retreat from climate action. Instead, they reflect a progression in how companies approach ESG—by integrating sustainability into core business strategies with realistic targets and tangible results.
The evolution of ESG: Practical strategies over empty pledges
Regardless of the apparent setbacks, ESG isn’t fading—it’s maturing. Companies are moving beyond flashy promises to focus on practical, results-focused actions to reach their sustainability goals. Here’s how corporate ESG is evolving:
Less talk, more action
Instead of making sweeping, long-term promises that invite scrutiny, businesses are shifting their focus to practical, results-driven efforts. This shift is partly driven by growing action against greenwashing, which has put companies under pressure to back up their claims with real, measurable results. For example, a logistics firm might not issue bold climate statements but roll out cleaner, fuel-efficient trucks that immediately reduce emissions. Or a manufacturer may quietly switch to sustainable materials and optimize energy use on the production floor—not for headlines, but because it makes business sense. By focusing on tangible, near-term wins, companies can adapt in real time, measure impact, and scale what works, avoiding the reputational risks associated with false environmental claims.
ESG is part of everyday business
Sustainability is no longer just a side project or a branding exercise—it’s becoming an essential part of how businesses operate. From product design and supply chain decisions to employee training and development, ESG principles are being woven into the fabric of daily operations. For companies to truly integrate sustainability, it can’t be confined to a single team or department. While having a dedicated ESG Team is critical, lasting impact comes when responsibility is shared across the organization.
When sustainability becomes a company-wide mindset rather than a siloed initiative, employees at every level feel empowered to make meaningful changes—whether by cutting carbon footprints, minimizing waste, or driving social impact. This approach not only fosters innovation and deeper engagement but can also drive financial growth. According to McKinsey, companies with strong ESG programs often see increased revenue, proving that sustainability and profitability go hand in hand.
Sustainability drives competitive advantage
Crucially, businesses now understand that ESG is a source of real business value—not just a check-the-box obligation for compliance. Consumers prefer brands that prioritize sustainable sourcing, investors favor companies with long-term resilience and stability, and operational efficiencies drive significant cost savings. In short, sustainability done well is a growth engine, fueling profitability, resilience, and long-term success.
The bottom line: ESG is evolving into a more strategic, integrated, and financially impactful approach. Companies that embed sustainability into their core operations will stay ahead of market changes and strengthen their position for sustained growth and resilience.
“Companies committed to sustainability will stay the course because it makes business sense.”
Tim Mohin Global Sustainability Leader at BCG
Navigate the next era of ESG with Aquent
In today’s shifting political and corporate landscape, it might seem easy to declare that ESG is dead. But that would be a mistake. What we're seeing isn't the end—it's an evolution—one where PR commitments are transitioning into integrated strategies that better align with each company's operational reality. Businesses recognize that ESG goals can't be sustained by good publicity alone. Real progress demands a data-driven, cross-functional approach that delivers measurable results. The future of ESG isn’t about abandonment—it’s about adaptation. Companies that embrace this shift will move beyond promises to make sustainability a core driver of resilience, profitability, and long-term success.
As ESG moves from big ideas to real action, success depends on having the right expertise. That’s where Aquent comes in. With decades of experience in talent solutions and a deep focus on sustainability, Aquent helps companies find the right professionals to navigate this changing landscape. Need Sustainability Consultants to embed ESG into your supply chain? Data Analysts to track impact? Creative Teams to tell your story? Aquent connects you with talent that drive real results. By partnering with Aquent, you tap into a network of experts who understand ESG inside and out. They can help refine your approach, bridge skill gaps, and embed sustainability into your company’s DNA. As the world redefines its commitments to people and the planet, Aquent is here to help you navigate the next chapter of ESG with confidence—turning ambition into measurable impact.
Looking to bolster your sustainability efforts? Aquent Sustainability is here to help. Whether you're building an in-house Sustainability Team or need an expert to advise on best practices, our sustainability recruitment and consulting services help companies grow their impact. Get in touch.
About the authors
Jody Mousseau is currently VP of Sustainability Development and Co-Chair of the DEIB Council at Aquent. She has over twenty-five years of combined management consulting, client relationship management, and sales leadership experience and a strong passion for sustainable living and social justice. Jody joined Aquent in 2015 in a business development role and subsequently also worked on the recruiting side of the business. Her goals include creating meaningful relationships with clients and colleagues, creating safe and inclusive spaces for all, and normalizing diversity and sustainability in life every day.
Chris Bambacus is the Director of Sustainability and a member of the Sustainability & Environment Employee Resource Group at Aquent. Joining the company in 2008 as a User Experience Designer, he took on Aquent’s annual Greenhouse Gas Emissions inventory and disclosures in 2020. With a passion for creative problem solving and systems design, he leads emissions reduction initiatives and develops the company’s renewable energy projects. Outside of Aquent, Chris serves on the Energy & Sustainability committee in Belchertown, MA and is working towards a MS in Sustainability Science at UMass Amherst with a focus on Renewable Energy and Efficient Design.
Julie Yamamoto is a sustainability, Climate & Tech Content Strategist. She has over 20 years of global experience creating ESG, B2B tech, and environmental communications for multiple sectors. Her work has been featured in leading platforms, including Forbes, TechTarget, GreenBiz, and American Forests, as well as in numerous enterprise and nonprofit digital channels. In previous roles, she led content marketing for Cloverly, OneTrust’s ESG & Sustainability Cloud, and the IBM Center for Applied Insights. A trained Climate Reality leader, Julie has driven sustainability initiatives such as IBM AI for Social Good (Environment), Watson Green Advisor, Forests for the Earth, and data science for conservation efforts. She holds a Master of Science in Marketing Management from Nanzan University and a Bachelor’s in Business Administration from Oglethorpe University.
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