In the wake of President Donald Trump’s inauguration on January 20, 2025, the United States has seen a rapid transformation in its Environmental, Social, and Governance (ESG) policy landscape. The administration’s swift actions—including the country’s withdrawal from the Paris Agreement and rollback of key federal climate disclosure requirements—have sparked debate among environmental advocates, investors, and corporate leaders.
One of the first executive actions taken by the new administration was the signing of Executive Order 14162, titled “Putting America First in International Environmental Agreements.” This directive initiated the U.S. withdrawal from the Paris Climate Agreement, marking the second such exit in less than a decade. The decision reversed the re-entry led by President Joe Biden in 2021 and has since been met with criticism from environmental organizations and state and local governments committed to decarbonization goals.
The administration’s break from international climate policy was quickly followed by changes to domestic ESG regulations. On March 27, 2025, the Securities and Exchange Commission (SEC) announced it would cease defending the climate-related disclosure rule finalized in March 2024. That rule required public companies to disclose both direct and indirect greenhouse gas emissions, along with broader climate-related risks to their operations. With the SEC now pulling back from enforcement, many companies face uncertainty over how to navigate transparency expectations from investors amid a shifting regulatory environment.
Federal scrutiny has also extended to state-level ESG actions. In April 2025, President Trump issued an executive order titled “Protecting American Energy from State Overreach,” instructing the Department of Justice to challenge state laws perceived as obstructive to federal energy development priorities. Critics argue the move could escalate legal conflicts between federal and state governments, particularly in states with progressive climate mandates, such as California and New York.
Despite these federal rollbacks, efforts to advance ESG goals are gaining momentum at the state level and among civil society organizations. Columbia University’s Sabin Center for Climate Change Law, in collaboration with Environmental Advocates New York, launched the “Model Climate Laws Initiative” earlier this year. The initiative aims to equip state legislators with comprehensive model bills to promote clean energy, enhance building efficiency standards, and accelerate the transition to electric vehicles. Organizers view the program as a strategic response to weakened federal support for climate governance.
Business leaders are now grappling with how to navigate the shifting regulatory terrain. While the administration argues that loosening ESG rules will stimulate domestic energy production and economic growth, many investors and companies continue to emphasize the long-term financial importance of sustainability and climate resilience. Several large institutional investors have reiterated their commitment to ESG principles, regardless of federal policy changes.
Ultimately, the evolving ESG landscape under President Trump presents both significant challenges and new dynamics for businesses and policymakers. The tug-of-war between federal deregulation and subnational climate activism is likely to define ESG strategy in the coming months. As this transition unfolds, the durability of private and public climate commitments will be tested—and possibly reshaped—by political, legal, and market pressures.
