The Impact of the US Election on Sustainability

What do you think the election will do to sustainability efforts in the US and abroad? I got asked this question a lot leading up to the election and now a little bit of uncertainty has passed as we have a new President-Elect. President-Elect Trump and his compatriots are pretty clear on what they think about ESG and sustainability. But that’s only part of the story here. There are several pressures to take sustainable actions and they extend well beyond one man or any administration – regardless of who would have won.

First, there’s the obvious laws that are being passed around the world. As I write this, a version of the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CS3D) in 35 countries and territories. There are also similar laws passed or nearly passed in 7 US states. If you look back at history this has the same pattern of adoption as GDPR and who was President when GDPR came about and became a defacto way of doing business? Trump. Go back and read the articles and you’ll see that he railed against GDPR just as much as he does ESG and yet GDPR still took hold. This is partially because he can’t block international law, regulations, and state laws. But that’s not really the reason it got adopted.

That brings me to pressures. Pressures come in many flavors with one of the largest being supply chain. There are businesses in jurisdictions where the international laws take hold and part of the requirement is to report Scope 3 emissions – the so called “supply chain emissions”. So in order for those companies to comply they’ll pressure all of their partners, suppliers, and vendors to report. Given that there’s 60,000 global companies falling under these laws starting January 1, 2025, there’s going to be a lot of pressure coming soon. You can already see this in several Code of Conduct agreements from major companies. It’s showing up on vendor purchasing questionnaires as well and already blocking deals from many companies I talk to on a daily basis.

Then there’s sentimental pressures. No need to grab a Kleenex. 67% of employees say they don’t want to work for companies that they believe aren’t taking positive action on sustainability. There are whole sectors that can’t hire enough people right now because they’re not moving forward. We’ve all seen the investor sentiment with activist investors and major fund managers forcing companies to act. And let’s not forget the consumers. It seems there’s always another boycott around the corner.

Even with all of those incentives to get you to act on sustainability I will give you the biggest one – money. Report after report shows that companies taking action on sustainability out perform their peers by 15%. Don’t believe me? Look at the Just 100. Being sustainable means being efficient. It means being responsible about the actions that you’re taking. It means your company is more lean and agile and has the ability to adapt. Being sustainable means you’re a better company and that’s just good business sense.

When you’re ready to get going there’s some low hanging fruit or “money under the mattress” as they say. An average of 46% of a company’s carbon footprint is in their tech. The good news is that addressing that means more operational efficiency and immediate ROI. You already have the data for this effort. The bad news is the data is all over the place, none of it is related to sustainability currently, and this is a fast moving and ever-changing environment involving your company and all of the companies you purchase your technology from. That’s why we built Terra Trust AI. Get started now and drive business outcomes that positively impact your company and the planet.