This is not the most fun time to be in corporate sustainability in the United States.
The pushback on the sustainability agenda from some quarters has been aggressive, starting a few years ago, but clearly accelerating with the results of the 2024 election in the U.S.
And through it all, I and others have made the case that the pullback in corporate America has been real, but mostly in name only, with “greenhushing” (going quiet) dominating... but the work basically continuing. There was good data to support that, with surveys showing the vast majority of companies were continuing their actions.
But live by the data and die by the data. Lately, it show a real softening and weakening of the corporate sustainability agenda, particularly in the U.S.
The Meh News
I see two big takeaways from two surveys of Chief Sustainability Officers (CSOs), one talking to U.S. execs from Weinreb Group (a top sustainability recruiter), and one global survey by Globescan and BSR.
The corporate function of sustainability is in retreat (somewhat). The first survey counted 193 CSOs in U.S. public companies, down from 216 — the first drop since 2011 (when there were 29). The roles are getting demoted, with only 14% saying they report to the CEO, dropping from a peak of 33%. And the share reporting to the Legal department rose to 23%. That last one, frankly, is a bummer. I can’t think of a place to report that makes sustainability less strategic and more of a pure compliance and risk reduction exercise.
The C-Suite is less interested. In the Globescan survey, just 36% of CSOs say that the CEO is “very engaged”, down from 55% a decade ago. Sustainability was perceived as a top three priority for CEOs by just 10% of respondents, down from 23% in 2016. To be fair (to CEOs and sustainability), there’s a lot competing for executive attention including geopolitics, supply chain disruptions (partly climate related), tariffs, energy crunches, AI, and more.
The global survey confirmed what you’d expect with these two realities: the focus is much more on compliance and regulatory requirements. In general, the ambition level seems muted, and there’s rising attempt to lock down commitments and be clearer about what companies can accomplish: another study from Deloitte shows two-thirds of FTSE 100 companies 'restating’ sustainability metrics, especially scope 3 emissions.
On a Positive Note…
All of that is not great, but let me put on a more optimistic (or less pessimistic) hat for a moment. The number of CSOs is down, but up dramatically over the last fifteen years. Perhaps some companies that pulled back were never committed to begin with; so that’s probably not much of a loss in actual action.
The data on the clean tech transition, which I’ve covered in many ways, continues to be really impressive. A lot of that is at the aggregate level: for example, 29% of global new car sales this year will be electric vehicles.
But stories keep popping up of company action that show continued movement. Putting aside for the moment what’s happening with the tech industry’s AI build out, which includes plans for large natural gas plants (which may or may not actually happen), the news of corporate action continues. For example, the Climate Group reports that 70% of the world’s big corporate fleets did not add any new gas or diesel vehicles last year. One member of their EV100 group, AstraZeneca, has electrified more than 80% of their vehicles.
Where We Are…
I’m not trying to sugarcoat anything. There’s clearly a malaise in sustainability in the U.S., which, let’s be honest, is not a surprise. We spent the last couple years facing real backlash to sustainability and “ESG.” It’s partly been a brand and vibes thing, with groups of customers or right-leaning social media influencers pressuring companies to slow down or abandon sustainability efforts (especially social initiatives like diversity).
But it’s also been driven by governments, from GOP state attorneys-general to the current federal administration. Combined, they’ve done a great deal to make the sustainability agenda harder. Some will call that a partisan statement, which is frankly ludicrous. It’s a policy statement, especially since attacking ESG, sustainability, DEI, and more is often a stated goal. The government has, among many other things, threatened legal action over DEI policies, paid companies (at least 5 times) not to build renewable energy, and enacted a slew of budgetary and regulatory actions to slow down the clean economy or gut environmental protection in general (which the Administration itself called “the Biggest Deregulatory Action in U.S. History”).
So, what to make of all of this? It’s a mixed bag of signals, for sure, but the work continues. All of us in this field don’t have much of a choice, really. The problems continue to grow with climate change making itself known around the world and likely accelerating with El Nino over the next year.
I see little choice but to power on and continue to make the case in whatever way works best for the organizations we interact with. We prove the return on investment when that makes the most sense. We bring in voices of key stakeholders, like customers, investors, and employees, when that’s effective. And we sometimes do something that has fallen out of favor lately, which is talk about companies doing what’s right, not just in their own long-term interest, but for the society that they are a part of and rely on.
In total, we must, to paraphrase MLK Jr., accept finite disappointment while maintaining longer-term hope.