In recent times, I’ve participated in numerous discussions where, almost inevitably, someone raises the question of whether sustainability is losing relevance in corporate environments and society at large. The frequency of this question led me to reflect on whether we are truly witnessing a setback or, conversely, seeing (often contradictory) signals of a more complex reality.
From my perspective, sustainability is far from being a passing trend. It is, rather, a logical necessity—one that may experience fluctuations (and inconsistencies) in public discourse and media attention, but that remains intrinsically tied to the long-term redefinition of prosperity.
Even before the start of President Donald Trump’s second term, the United States had already begun to show troubling signs of backsliding—particularly in sustainability, democratic governance, and the erosion of international order and multilateralism. The new Trump administration can be seen as an acute and disruptive expression—not at all benign—of a broader and deeper syndrome: the weakening of democratic culture, the proliferation of disinformation, the spread of populism, the rise of autocracy and unilateralism, the resurgence of economic protectionism, the transactionalization of diplomacy, and growing intolerance towards segments of the population. The Trump administration did not originate these phenomena, but it has become a paradigmatic expression of them all.
One of the early indicators of this regression—especially in the realm of sustainability—was the wave of lawsuits filed by companies and U.S. states against regulations based on ESG (Environmental, Social, and Governance) metrics, which were seen as excessive and potentially harmful to corporate competitiveness. Notable cases include Kentucky Bankers Association vs. Kentucky Attorney General, a class action lawsuit by eleven states against asset managers, corporate lawsuits against New York’s Climate Change Superfund Act, and the American Sustainable Business Council’s opposition to Texas’s Anti-ESG legislation.
Another significant signal came in August 2023, when S&P Global Ratings announced it would cease publishing ESG-specific indicators that had been introduced in 2021. While initially perceived as a retreat, S&P clarified that the decision aimed to integrate more robust and data-driven metrics, reaffirming the central role of sustainability in its credit risk assessment methodology.
The ambivalent stance of BlackRock, the world’s largest asset manager (with $11.6 trillion in assets under management), further illustrates this complexity. After championing sustainability beginning in 2020—when its CEO highlighted climate risks in a widely circulated letter—BlackRock joined the Net Zero Asset Managers Initiative, only to withdraw in January 2025, reflecting growing skepticism toward the ESG agenda.
Trump’s reelection has accelerated these reversals. During his first term, his administration dismantled more than 100 environmental regulations and significantly weakened the authority of the Environmental Protection Agency (EPA), while also withdrawing from the Paris Agreement under the UN Framework Convention on Climate Change (UNFCCC). In his current term, this rollback is intensifying through new executive orders that promote deforestation, reintroduce single-use plastics in protected areas, and eliminate incentives for electric vehicles.
Nonetheless, the U.S. is not monolithic. States like California and companies striving to maintain high sustainability standards—often driven by international competitive pressure—create meaningful counterbalances. Particularly noteworthy was the Inflation Reduction Act (IRA), passed under the Biden administration in 2022, which mobilized nearly $400 billion in green industrial subsidies to accelerate sustainability across the U.S. economy. Initially viewed as a catalyst for healthy transatlantic competition in climate leadership, the policy led instead to significant disinvestment and offshoring by major European companies—Mercedes, BMW, Enel, Holcim—drawn to the U.S. by faster, more accessible green incentives compared to the EU’s Next Generation EU Recovery and Resilience Facility, effectively the Union’s first federal budget.
President Trump issued an executive order that temporarily froze the disbursement of funds allocated under the IRA. This was part of a broader initiative to reassess federal spending on climate and energy programs approved by the previous administration. However, several federal judges blocked these efforts through preliminary injunctions, citing concerns about executive overreach and disruptions to constitutionally established processes.
Europe faces its own challenges. Excessive bureaucracy and overregulation—frequently highlighted, including in the widely discussed Draghi Report on EU competitiveness—are cited as serious barriers. The latest regulatory simplification proposals introduced in the Omnibus packages (February 26, 2025) target key environmental legislation, including potential revisions to the Corporate Sustainability Reporting Directive (CSRD), originally set for mandatory implementation this year. Meanwhile, the EU Sustainable Finance Taxonomy—an essential tool for redirecting capital flows toward sustainable activities, and one in which I am personally involved on water-related issues—has so far retained its binding nature despite pressures to make it voluntary.
Despite growing skepticism, delayism, and outright denial, I remain convinced that sustainability will prevail. Not due to naïve optimism or dogmatic belief—nor simply because it is the rational choice—but because it is a logical necessity. The physical risks associated with unsustainable practices and the transition risks emerging from our responses have become material financial risks. In corporate settings, sustainability is no longer the sole domain of a Chief Sustainability Officer—it has become a strategic priority directly involving CFOs and CEOs. Ultimately, sustainability is now an essential factor for competitiveness and relevance in a complex and increasingly fragmented geopolitical and geoeconomic landscape. It is also an indispensable effort in redefining what we mean by prosperity.
About the author: Gonzalo Delacámara is one of Spain’s Top 100 Speakers in Politics, Economics and Society. Global Expert on Economic Management of Natural Resources and Climate Change Adaptation.
Photo: Sunira Moses (Unsplash).
Global Expert on Economic Management of Natural Resources and Climate Change Adaptation.
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