Trump, sustainability and strategic communications

Donald Trump’s inauguration was never going to be a quiet affair, regardless of the freezing weather forcing the ceremony and victory parades inside to smaller venues.

The flurry of executive orders signed in the first day of his second term included declaring an Energy Emergency (giving a green light to new oil and gas infrastructure and production), withdrawing from the Paris Agreement and revoking electric vehicle production targets.

That and ongoing criticism about net zero and recent the corporate withdrawals from the Net Zero Asset Management initiative and GFANZ brings the ‘woke capitalism’ agenda and criticism of ESG and corporate sustainability measures into the mainstream. It could be seen as a moment that damages and reverses the global consensus on the need to cut greenhouse gas emissions and prioritise nature and climate.

Many businesses, not just those in the green economy but all those that have net zero targets and sustainability strategies, are watching developments with some nervousness.

Yet, for many businesses it is not a question of whether they continue to pursue strategies and policies to decarbonise their operations and embrace sustainability, nearly 195 states and the EU remain signatories to the Paris Agreement, renewable energy is now the cheapest form of power and our own research and numerous other studies show that consumers expect business to have a plan to be greener.  Investors also want to understand the ESG risk and sustainability strategy of the companies they invest into.

In light of that, corporate retreat from sustainability isn’t an option or a priority for many businesses. The pragmatic choice looks to be soldiering on but keeping heads below the parapet.

Equally, when you pick at the detail of what Trump is saying, he isn’t necessarily taking a negative stance against sustainability and green products and services, he’s coming down on policies that force sustainable products and services as a default choice. On EVs he stated that Americans could buy whatever car they wanted, which would include an EV should they choose. On oil and gas he’s encouraging increased production primarily as an export product to enrich the US, it doesn’t mean the end of the US solar and wind industry.

That doesn’t mean that these changes are climate positive, they’re not. The power of the US to lead change and drive action on the climate is huge and the withdrawal from the Paris Agreement and increased climate scepticism is something that should worry anyone who believes in the science of climate change.

Yet for business a more pragmatic reality emerges. In a world where its stakeholders expect it to prove there is a solid, science-aligned decarbonisation strategy and transition plan, and wants to do business with organisations that are sustainable, then the challenge is how they continue to do that in a world where scepticism of net zero and ESG is rising.

The outcome is that business and finance has to remake the case for climate and nature policies. It can’t rely on the political consensus of the Paris agreement or on overt investor support for ESG. Instead corporate narratives have to focus on both the commercial and the environmental benefits of sustainability programmes not just today but measured on a timeframe of 10-20 years+ when investors, consumers, politicians and others may well take a very different view on the level of corporate leadership they expect to see.

Staying the course on sustainability, while building a narrative that avoids being cancelled is the order of the day.