Companies Revamp ESG Amid Political Backlash and Trade Challenges

Amid evolving political and regulatory landscapes, a significant majority of major corporations are actively revising their Environmental, Social, and Governance (ESG) strategies, a new report from The Conference Board reveals. The shifting climate of scrutiny and backlash around ESG commitments has prompted companies to rethink how they frame and communicate their sustainability efforts. This recalibration is seen as a strategic response to mounting resistance and emerging trade pressures that threaten to stall progress on corporate sustainability goals.

According to the report, approximately 80% of large firms surveyed are revisiting their ESG approaches. This widespread shift reflects the growing complexity of managing sustainability amid heightened political debates and tightening regulations. One of the clearest trends emerging is a focus on messaging. Over half of the sustainability executives surveyed—52%—acknowledge that their companies are reworking sustainability communications. A notable number of these firms are distancing themselves from the “ESG” terminology, opting instead for alternative language that may resonate better with stakeholders in a polarized environment.

The increasing scrutiny of ESG efforts is not new, but its intensity has escalated. Andrew Jones, the report’s author and Principal Researcher at The Conference Board, emphasized that the backlash has not caused most companies to retreat from their sustainability objectives. Instead, it has pushed them to adjust how they approach, integrate, and communicate these issues within their business strategies. The desire to avoid triggering political or public resistance is reshaping ESG narratives, underscoring how companies are navigating a more cautious and calculated path forward.

Trade policy is adding another layer of complexity to the sustainability landscape. The report notes that 66% of respondents believe recent tariffs and new trade measures are making it harder to achieve sustainability goals. Nearly half of the surveyed executives—45%—expect these trade dynamics will delay investment decisions related to sustainable initiatives. Such challenges point to a growing tension between global economic policies and environmental ambitions, as firms struggle to balance regulatory compliance, competitiveness, and their green commitments.

Perhaps the most striking insight from the survey is the rising expectation that ESG resistance will continue or even intensify. An overwhelming 90% of the executives anticipate persistent backlash over the next several years. This marks a sharp increase from 63% who expressed similar concerns in 2023, signaling a growing polarization around corporate responsibility and sustainability practices. The areas most under fire are climate-related commitments, especially net-zero goals, and the language tied directly to ESG frameworks. This resistance appears to be fueled by broader political and ideological divides, complicating efforts to achieve consensus on climate action.

The sources of this backlash have also shifted. While activist groups and advocacy organizations were once viewed as the primary opponents of ESG efforts, the report indicates a change in sentiment. Today, federal policymakers are cited as the main drivers of anti-ESG sentiment. This shift highlights how governmental actions and regulations are increasingly influencing corporate sustainability strategies, sometimes creating an environment of uncertainty and caution. It also reflects the politicization of ESG topics in public discourse, with policy decisions often reflecting broader ideological battles over climate change and corporate governance.

The findings are based on a March–April 2025 survey of 125 sustainability executives from large U.S. and multinational companies. The breadth of respondents provides a snapshot of how leading corporations are adapting to these challenging conditions. The report underscores that while companies remain committed to sustainability, their tactics are evolving in response to external pressures. This includes not only adjusting the substance of ESG initiatives but also carefully managing how these initiatives are communicated internally and externally to avoid exacerbating controversy.

The evolving landscape presents both risks and opportunities. On one hand, growing political resistance and regulatory hurdles threaten to slow down corporate sustainability progress and complicate investment decisions. On the other hand, the need to rethink communication strategies and integrate ESG concerns more deeply into business operations may ultimately lead to more robust and resilient sustainability models. Companies that can successfully navigate this complex environment may find themselves better positioned to maintain credibility with stakeholders and drive long-term value.

This report follows similar findings from other recent studies, such as Deloitte’s report highlighting the challenges companies face in advancing ESG strategies despite data quality issues. Together, these insights paint a picture of an ESG movement at a crossroads, grappling with external skepticism and internal adjustments.

In summary, the current political and regulatory shifts are compelling companies to overhaul their ESG strategies, particularly in how they communicate sustainability commitments. With 80% revisiting their approaches and 90% anticipating ongoing resistance, the corporate world is entering a phase of recalibration and strategic messaging. As trade tensions and political scrutiny continue to impact decision-making, businesses will need to strike a careful balance between transparency, engagement, and pragmatism in their pursuit of sustainability goals. The road ahead for ESG is undoubtedly complex, marked by both challenges and the imperative for innovation in corporate responsibility.