Sustainability in the time of Trump and AI

In October 2024 I was conducting a regular training programme on sustainability and ESG (environmental, social and governance) management. The participants were keen to understand the main business approaches and how to apply them.

In December 2024, while conducting the same programme with a new group the attitude had changed. Participants were now keen on understanding how to minimise ESG activities or avoid them all together.

The only thing that had changed was the election of Donald Trump in November.

The Trump administration has rolled back the US sustainability agenda with a renewed drive to maximise oil and gas production, highlighted by resumed leasing in the Arctic National Wildlife Refuge (ANWR) and the fast-tracking of pipeline approvals.

Federal agencies have systematically dismantled Biden-era climate rules, heavily diluted the Securities and Exchange Commission’s (SEC) climate disclosure mandates, and aggressively purged diversity, equity, and inclusion (DEI) frameworks from federal contracting.

Federal pension funds are restricted from using ESG factors in their investment decisions, weaponising the term as an emblem of “woke capitalism”.

Sensing this shifting political wind, several high-profile corporations have quietly backpedalled.

Larry Fink, CEO of BlackRock, famously dropped the acronym “ESG” from his vocabulary, citing its toxic politicisation.

Meanwhile, consumer-facing brands like Tractor Supply, Harley-Davidson, and Ford have significantly rolled back their corporate DEI initiatives and tempered their public climate pledges following intense pressure from conservative activists.

However, taking this political pivot as a signal to entirely dismantle corporate sustainability efforts would be a strategic miscalculation.

First, ESG and corporate social responsibility are embedded in corporate culture and business models, especially for large multinationals. Micro, small, and medium enterprises (MSMEs) also realise that sustainable supply chains and fair labour practices are essential to remaining competitive and resilient in the global market.

Second, US politicians do not dictate global markets, regulatory frameworks and compliance systems widely adopted across major economies.

The European Union’s Corporate Sustainability Reporting Directive (CSRD) and the globally recognised International Sustainability Standards Board (ISSB) frameworks mean that robust governance models are entrenched.

For Malaysian companies the Securities Commission has mandated the use of ISSB within the National Sustainability Reporting Framework (NSRF) and for those exporting globally or listed on Bursa Malaysia, stringent sustainability is a mandatory reality, regardless of who sits in the Oval Office.

Third, corporate stakeholders including institutional investors such as EPF, consumers, regulators and civil society, have not changed their long-term views. These stakeholders operate on multi-decade horizons. By contrast, the temporary presidency of Donald Trump will end in just over two years.

Crucially, the mechanics of managing sustainability are undergoing a revolution thanks to artificial intelligence (AI).

Historically, the strongest corporate resistance to ESG adoption stemmed from the heavy burdens of time, capacity and cost.

Gathering Scope 3 emissions data or tracking supply chain labour practices used to be exhaustingly manual and expensive.

Today, as AI is adopted more widely, sustainability becomes much easier to manage. Generative AI and advanced analytics can automate data collection, streamline compliance reporting and optimise energy use in real-time.

Consequently, the change management costs and the continuing commitment to ESG programmes are becoming significantly cheaper and quicker to execute.

Ultimately, the more pragmatic and sceptical attitude emanating from the Trump administration, which many people instinctively support, should not be viewed as a death knell for corporate sustainability. Instead, it serves as a valuable catalyst.

It forces companies to strip away performative “greenwashing” and review their approach, ensuring that their sustainability and ESG initiatives deliver genuine, measurable business value.

Now is the time to refine and upgrade your sustainability strategy using the power of AI, not to abandon it altogether.

The views expressed are those of the writer and do not necessarily reflect those of FMT.