Corporate Climate Initiatives Persist Despite Federal Rollbacks

Even as the U.S. federal government retreats on climate policy, most firms continue to be dedicated to sustainability and greenhouse gas reductions because they continue to face constant pressure from investors, customers, workers, local communities, insurers, and global partners. These parties understand the financial and operating threats of rising temperatures, intense weather, and chronic pollution. A Kearney 2024 survey reported more than 60% of chief financial officers intend to spend at least 2% of revenues on sustainability initiatives in 2025, further demonstrating economic imperative around climate-smart business.

Sustainable practices have long been employed by companies to reduce costs and maintain efficiency. Megabrands such as Maersk have developed precise plans for greenhouse gas reductions that are aligned with client requirements and cost-effectiveness. The logistics company plans to reduce its carbon emissions by a third between 2022 and 2030, and achieve net-zero emissions by 2045. Just like that, Meta and Google have invested nearly $2 billion in renewable power in the Tennessee Valley Authority service area even without government policies, while Microsoft and Amazon are selecting the sites for their data centers based on how close they can get to cleaner sources such as nuclear power. These business decisions are proof of a shift towards including climate risk in strategic planning and renewables and emissions reductions as central business drivers, rather than voluntary ones.

Global voluntary disclosure of greenhouse gas emissions is one of the characteristic elements of this shift. As of 2024, a total of 25,000 firms, of which 85% of the S&P 500, reported emissions to non-profit Carbon Disclosure Project (CDP), and another 12,500 smaller and medium enterprises also reported as well. Disclosure allows firms to monitor environmental consequences and prepare, particularly as regional and global-level regulation tightens. California, for example, has mandatory official emissions reporting, and others will inevitably follow suit even if the federal government doesn't. The European Union is also introducing climate disclosure rules, which were delayed in early 2025 to allow companies additional time to transition. 

Apart from disclosure and regulation, supply chain management is the heart of business climate action. Supply chains tend to be the biggest source of a firm's emissions and are highly vulnerable to climate disruption like heatwaves, storms, and droughts. Companies estimate that climate-driven supply chain risk stands at $162 billion, far exceeding the cost of risk management. As a result, nearly 80% of the largest seven global industries had set environmental expectations for their suppliers by 2023. They include tracking emissions, emission reductions targets, and sustainable sourcing. Walmart, for example, has prevented one billion tons of carbon emissions from the supply chain within fewer than seven years by helping its suppliers reduce their environmental footprint while, in the process, making them more efficient.

Public opinion and consumer behavior are also involved. More than two-thirds of Americans support climate action, and even if companies are not publicly facing, they must be mindful of employees' expectations as well as customers'. Those companies that are defined as sustainable, such as Patagonia, see enhanced customer loyalty and positive reputation. Sustainability can also be used as an employee retention and engagement program, especially by young people seeking environmental accountability from employers.

Insurers and lenders are also corporate climate behavior drivers. The majority of insurance companies have declined or discontinued insuring new fossil fuel ventures, while others encourage companies to invest in emission reduction or climate adaptation. Climate losses will propel the current 5% to 7% annual growth in insured losses, compelling insurers to rethink risk portfolios and underwriting approaches. Swiss Re and large insurers have called for more forceful action to reduce emissions through investment and insurance policy. The movement toward private climate governance—companies voluntarily adopting sustainability independently beyond government auspices—is increasingly at the heart of the larger climate response.

These steps provide a buffer period when federal policy is fractured and slow. Policy influences company plans less and more from risk management, operational performance, stakeholder pressures, and long-term profitability. While government action is essential for systemic change, company action in the war against climate change is countering the impact of policy withdrawals and reducing the adverse effects of climate change. Source/Credits

Article by Ethan I. Thorpe, Michael Vandenbergh, and Zdravka Tzankova on The Conversation. Content is a courtesy to Phys.org through The Conversation.