The climate and ESG world went into fight or flight mode when President Trump was reelected in 2024. The past five months since his inauguration have seen a vibe shift. Banks backed out of net-zero commitments, Florida introduced an anti-ESG bill, and the Trump administration gutted billions of dollars in clean energy grants. In short, it’s been a tumultuous year so far for ESG.
To help recap all the changes, here are some of the biggest, most impactful ESG stories we’ve covered in the last five months.
We won’t always have Paris. President Biden was barely in his jet before President Trump started reversing his predecessor’s policies by executive order. On his first day in office, President Trump withdrew the US from the Paris Climate Agreement, the international accord between countries agreeing to cut greenhouse gas emissions. This was the latest in a series of flip-flops by the US on the agreement—first negotiated in 2015 under President Obama. Trump then pulled the US out in his first term in 2020, and we rejoined under Biden in 2021.
The unwritten rule. In March, the SEC dropped its defense of the climate risk disclosure rule, which had faced multiple lawsuits, effectively making it moot without “actually rescinding the rules,” the Wall Street Journal explained. The approved rule from March 2024 would have required companies to report scope 1 and scope 2 emissions; this was an already pared-back version from one that would have also required scope 3 reporting, according to ESG Dive. The SEC’s climate disclosures were similar to those required in the EU and California, where many companies are already reporting to stay in compliance in those regions or voluntarily to investors.
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California dreaming. Speaking of California, the 4th largest economy in the world’s own climate disclosure rules will go into effect in January 2026. Companies with revenues over $1 billion will need to report scope 1 and scope 2 emissions for the 2025 fiscal year. Their Scope 3 reporting deadline has been pushed to 2027. Companies with more than $500 million in revenue will need to disclose climate-related financial risks and mitigation plans by January 2026, then every two years. Because most US companies want to do business in California, these regulations act as de facto national rules that trickle down to other states—known as the California effect.
Eroded ruling. In May, the Supreme Court limited the reach of the 1970 National Environmental Policy Act. In a unanimous decision from participating justices (Gorsuch recused himself), the Court reversed a ruling from the court of appeals in Washington that a railroad connecting crude oil from Utah to the Gulf Coast had to consider the downstream and upstream environmental effects of oil drilling and distribution. The Supreme Court’s decision now limits NEPA’s scope, no longer requiring companies to consider upstream and downstream effects—as long as those impacts fall within what the conservative majority called a “broad zone of reasonableness.”