By Marya Skotte, Senior Sustainability Consultant
Over the past several months, we’ve seen corporate sustainability enter a new era—one shaped by cautious pragmatism; federal rollbacks of climate-related commitments, funding and support; new state-level regulation, and increasingly global expectations for corporations. We, along with our clients and many other sustainability professionals, are trying to navigate this new reality. The insights shared in this piece come from what we’ve been seeing with clients; our understanding of developments at the state, federal and international levels; and conversations with other sustainability practitioners. At many organizations, especially in the U.S., sustainability isn’t dying—it’s simply going undercover.
Pullback or Repositioning?
Some of our clients are dialing back public messaging around sustainability, DEI (diversity, equity and inclusion), and climate change. The reasons vary: political pressure, cost-cutting amid recession concerns, or simply a desire to avoid controversy in a polarized environment. Certain words— “climate,” “DEI,” “net zero”—are being scrubbed from reports or replaced with more neutral terminology like “resilience” or “risk management.” We’ve heard of similar developments from other practitioners working in corporate sustainability.
But here’s the truth: Even as communications strategies shift, the work often continues behind the scenes. Projects may be repackaged or slowed, but they aren’t abandoned altogether—especially at companies with global footprints. institutional investors in the EU, or significant operations in California, where regulatory pressure is only intensifying. Many companies have already made significant investments in environmental, social, and governance (ESG)-related initiatives and goals and have made public commitments (approved by the board) to reduce their emissions, increase energy efficiency, reduce waste, transition to carbon neutrality, etc. Ultimately, investors understand that climate change does pose significant risk to their investments, hence companies’ commitments to reducing their risk and contributions to climate change.
State and Local Policy: A Quiet Driver of Change
While the federal narrative on sustainability can feel fractured, state laws are proving to be powerful accelerants. California’s climate disclosure laws (SB 253 and SB 261) have sent ripples across industries nationwide, regardless of whether companies are headquartered in the Golden State. Meanwhile, Extended Producer Responsibility (EPR) legislation is gaining momentum, with about seven states already rolling out packaging and waste regulations that are pushing companies toward circularity, with many more states developing legislation.
In New York, we’re seeing real movement thanks to a mix of climate mandates, local building performance standards, and financial incentives like the NYSIF Climate Action Credit Program. These state-level frameworks are pushing sustainability up the priority list—often faster than internal company strategy alone.
Renewable Energy: A Pillar Under Pressure
Renewable energy has long been a steady force in sustainability investment—praised not just for emissions reductions, but for its financial upside. Solar projects, in particular, have offered a triple win: cost savings, energy independence, and long-term resilience in a volatile energy market.
But the recent reconciliation bill has thrown a wrench into this momentum. Changes to tax incentives and added uncertainty around permitting and interconnection will likely slow progress across the sector. Some clients are hitting pause on planned projects or reevaluating the ROI of new deals—particularly for power purchase agreements (PPAs) and large-scale deployments.
Still, behind-the-meter solar and community partnerships continue in some regions, often driven by facilities, finance, or operations—not just sustainability teams. Even amid new headwinds, clean energy remains woven into corporate strategy and will play a large role in helping organizations meet their emissions targets, meet investor expectations, and align with state and international climate-related regulations. But it’s clear: the path forward is no longer as frictionless as it once seemed.
Reframing ESG as Risk Management
One of the clearest shifts we’re seeing is a reframing of ESG—not as a moral imperative or standalone program, but as a core component of enterprise risk management. Climate change is increasingly being treated like any other risk: one that can damage physical infrastructure, disrupt supply chains, and undermine long-term business continuity.
The same goes for social and governance issues. From lawsuits stemming from poor labor practices to reputational damage linked to corruption or toxic cultures, ESG isn’t optional—it’s about protecting brand value and operational resilience. Framing sustainability in this way helps companies navigate political sensitivities while still pursuing meaningful action.
Global Influence and the Role of Regulation
The U.S. may be grappling with anti-ESG sentiment in some circles, but globally, the direction is clear. The EU’s Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) are creating a complex regulatory landscape that U.S.-based multinationals can’t ignore. For many companies, aligning with international expectations is not just a legal requirement—it’s a competitive necessity that will continue well into the future.
What Lies Ahead
We may not see splashy sustainability announcements in the next year or two. But here’s what I am seeing:
- Cross-functional collaboration is deepening, especially between sustainability, finance, real estate, and legal teams as climate risk becomes a board-level concern.
- Data visibility and digitization—especially powered by AI—is enabling real-time insights into supply chains, energy use, and emissions. Companies are leveraging this to meet emerging reporting requirements and find new efficiencies.
- Talent demand remains strong. Despite the political noise, companies still need people who can help them make sense of climate risk, conduct greenhouse gas inventories, vet offsets and renewable energy certificates (RECs), and engage suppliers on scope 3 emissions.
- More partnerships and alliances are forming, especially across value chains, to address shared climate and sustainability goals in a fragmented policy landscape.
Final Thoughts: The Work Continues
Corporate sustainability is evolving. Yes, it’s navigating tension between opposing forces—regulatory pressure and political pushback, cost concerns and long-term risk. But the direction is still forward. Companies are learning to operate more quietly, more strategically, and with a sharper focus on measurable impact.
Learn more about our approach to sustainability and how we help organizations navigate this evolving landscape.
This is not a retreat. It’s a recalibration.
And if history has shown us anything, it’s that sustainability adapts. It may not always be center stage, but it’s always moving—sometimes softly, but always forward.
