As the Trump administration takes steps to exit the Paris Agreement and rolls back environmental regulations, corporations face a choice: stay committed to climate goals or follow the federal lead. This regulatory shift presents a potential retreat from climate commitments for some businesses.
However, are the world’s largest corporations aligning with these federal changes?
Some companies, like Wells Fargo, have adjusted their climate targets, citing obstacles like policy inconsistency and technological lags. BP has also rolled back its expectations for a swift transition to renewable energy, attributing this shift to evolving regulatory landscapes.
In contrast, numerous global firms, such as the retail giant Walmart, continue to prioritize long-term environmental strategies, often working discreetly to maintain their climate objectives while avoiding public scrutiny.
The influence of state and local policies, along with pressure from the European Union, customers, and other stakeholders, keeps these corporations engaged in reducing their environmental impact. They recognize the potential competitive edge in moving towards a sustainable future.
AP Photo/Ringo H.W. Chiu
As an academic in economics and public policy, I have explored the motivations behind corporate environmental actions. My book, “Corporations at Climate Crossroads,” delves into the climate strategies and performance of major companies listed on the Global 500 and S&P 500 over the last decade.
The environmental actions of these corporations are influenced by a variety of factors, including regulatory pressures, stakeholder expectations, and the desire to build a positive reputation with various groups.
States wield influence, too
State-level climate policies in the U.S., particularly in California, significantly impact multinational businesses. As the fourth largest economy globally, California continues to advance climate regulations while federal policies shift.
California’s climate initiatives include an extension of the cap-and-trade program and binding targets for net-zero emissions by 2045. These efforts align with the ambitions of the European Union’s Green Deal.
The U.S. Climate Alliance, composed of 24 governors, represents a significant portion of the U.S. population and is committed to the Paris Agreement’s goals, further influencing corporate climate strategies.
Several states are exploring “polluters pay” laws, requiring companies to fund climate adaptation projects. States like Vermont and New York have enacted such legislation, reflecting a growing trend.
Climate laws still apply in Europe and elsewhere
Globally, multinational corporations must adhere to diverse climate regulations. The European Union, for example, aims for significant emission reductions by 2030 through comprehensive policies including climate reporting and carbon taxes.
Countries such as the United Kingdom, New Zealand, and Singapore also have stringent climate reporting requirements. These laws are advancing despite adjustments in timelines.
The International Court of Justice recently issued an advisory opinion affirming that countries have a legal duty to protect the climate, potentially increasing pressure on businesses worldwide.
Multinationals put pressure on supply chains
Efforts by multinational companies to reduce their climate impact extend to their supply chains. Walmart, as a major global retailer, faces extensive regulatory demands and influences numerous suppliers to adopt sustainable practices.
Walmart’s Project Gigaton, launched in 2017, exemplifies this effort by targeting a significant reduction in supply-chain emissions. Various suppliers have contributed to achieving these goals ahead of schedule through innovative measures.
While Walmart has adjusted some of its ambitious emissions targets, the company continues to increase its reliance on renewable energy and reduce emissions per revenue unit.
There are profits to be made in clean tech
The financial benefits of investing in clean technology are evident, with global clean energy investments surpassing those in fossil fuels since 2016. This trend continues to accelerate, indicating lucrative opportunities in the climate tech sector.
Corporate-driven venture deals in climate tech have been significant in 2025, with companies seeking strategic advantages through technology and supply chain integration.
Companies look to the future
As climate risks increase, businesses are navigating complex pressures to both address and capitalize on energy transitions. While traditional energy investments persist, companies are also forecasting and investing in renewable energy innovation.
Corporate leaders from diverse sectors emphasize aligning sustainability initiatives globally to effectively manage regulatory and consumer expectations, ensuring long-term viability and environmental stewardship.
