Last week's World Economic Forum conference focused on five key priorities: rebuilding trust, reimagining growth, safeguarding the planet, industries in the intelligent age, and investing in people. However, the event was overshadowed by the political shift brought on by President Trump's election. His administration's policies—including withdrawing from the Paris Climate Agreement, promoting oil drilling, and prioritizing national interests over global cooperation—diverge sharply from Davos' key priorities of sustainability, climate change, global trade, and collaboration.
The political shift under Trump's administration has intensified existing concerns about ESG and sustainability. In 2024, several sustainability funds underperformed market expectations, fuelling scepticism about green investment returns1. Some large companies have begun withdrawing from collaborative sustainability initiatives or scaling back climate-related commitments2. Moreover, younger investors are increasingly redirecting their focus toward traditional growth metrics, with AI and technology investments gaining prominence3.
The regulatory landscape is experiencing uncertainty and potential scale-back. In the United States, the Securities and Exchange Commission's (SEC) climate disclosure rule faces legal challenges and is currently stayed pending review. In the European Union, concerns about reporting complexities have led to discussions about streamlining existing sustainability laws4. Several EU countries have yet to fully adopt the Corporate Sustainability Reporting Directive (CSRD) into national law5. In the UK, the new government has emphasized economic growth and dropped the Nature and Environment Bill, raising questions about the future of sustainability-focused policies6.
Despite these shifts, the reality of climate change and biodiversity loss persists. The financial imperative to address climate risks remains, and the transition to a low-carbon economy has likely passed its inflection point. While U.S. companies may not face SEC climate regulations, non-financial disclosure requirements are not disappearing. The EU will likely refine its climate regulations in 2025, and state-level regulations in the U.S., such as California's recent climate bill, are likely to increase7. Several markets in Asia, along with Australia, Canada, and Switzerland, are developing their own sustainability frameworks8.
While recent political shifts and ESG scepticism have created uncertainty, the fundamental challenges of climate change remain inescapable business realities. Companies will need to navigate a fragmented landscape with varying regulations across regions, from refined EU frameworks to emerging standards in Asia and evolving state-level mandates in the U.S. The themes discussed at Davos remain relevant, even as their implementation becomes more complex and locally nuanced.
Feeling overwhelmed by the shifting sustainability reporting landscape? Find out more about how we can help you with your corporate reporting here, or get in touch with one of our experts who can help you navigate these complex waters.
Black Sun Global is a stakeholder advisory and engagement agency that's been driving transformation and positive change for ambitious brands for more than 20 years. With deep expertise in disclosure and reporting, ESG, sustainability, and digital engagement, we reshape how organisations connect with customers, investors, employees, and the wider world.
We are trusted partners to some of the most influential global organisations, sparking innovation and sustainable performance through our strategic insights, partnerships, and proprietary technologies.
As founders of the Positive Change Group, we are on a mission to create a new kind of stakeholder relations partner. Our world-class specialists work closely with executive leadership teams to protect reputations, inspire trust, and promote responsible business practices - building resilience and long-term value in a rapidly changing world.
For more information, please visit: www.blacksun-global.com
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