Unpredictable weather conditions – a defining factor of climate change – are nothing new to sustainability leaders.
Equally disruptive are the forces that seem to be creating a lot of turbulence for companies – including political cliffhangers and a market changing rapidly in response to external pressures from stakeholders.
It’s always better to be proactive rather than reactive when facing a future that’s hard to predict. Let’s take a closer look at what’s creating this “perfect storm” and explore how Chief Sustainability Officers and their teams can weather the impacts.
First, let’s start with what’s on everyone’s minds – the uncertainty of the U.S. presidential election. Analysts are revisiting Vice President Kamala Harris’s positions on environmental policy while also bracing for the possibility that if Donald Trump is elected, he will likely dismantle environmental protections President Joe Biden has put into place. Some possible outcomes, based on what we know about each candidate’s history and positions:
A Harris victory with Democratic control of the House would likely safeguard the Inflation Reduction Act (IRA), possibly further extending regulatory support.
A win by Trump with a divided Congress might not result in a complete IRA repeal but could lead to the US withdrawing from the Paris Agreement again - a process that would take four years. Republicans might also restrict the IRA by adjusting IRS regulations, making it harder to access tax benefits.
Trump would likely bring back H.R. 1, increasing U.S. oil, gas and coal production and easing permitting restrictions that delay pipelines, refineries and other fossil fuel projects
Vice President Harris would likely end federal support for the fossil fuel industry and stop new oil leases on federal lands and waters. In the past, she endorsed a ban on fracking and, if elected may pursue EV mandates nationwide.
There is also the possibility that Trump will implement Project 2025, which includes suggestions for how to drive a “fossil-fuel agenda,” dismantle entire agencies and “hundreds of smaller and lesser-known federal programs and statutes that safeguard public health and environmental justice.”
Perhaps emboldened by many of these developments and the Supreme Court’s abolishing affirmative action on college campuses, external stakeholders are challenging companies to change direction on their most critical climate and DEI initiatives. We’ve witnessed companies, either under attack from critics or on their own accord, revisit and even remove their sustainability and inclusion goals – Tractor Supply Company, Microsoft and John Deere are a few prominent examples.
Not surprisingly, these abrupt changes have created advocacy and customer fallout and brand damage in some cases, most notably with the Tractor Supply Company. The National Black Farmers Association called for Tractor Supply CEO Hal Lawton’s resignation and said the company has “little respect for (Black) farmers.” Squirrelwood Equine Sanctuary, which says it spends more than $65,000 annually at Tractor Supply, plans to stop shopping at the chain. And these are just a few examples.
With uncertainty ahead, a company’s North Star has never been more important.
Whether we have a Democrat or Republican in the White House or are calling companies’ initiatives by different terminology (“social impact” or “inclusion” versus DEI, “sustainability” versus “ESG”), the reality is that change is the only constant. While these political, and market forces can certainly feel overwhelming, the most successful companies will be able to ride out this storm by following their North Star – returning again and again to their core mission and most critical priorities.
The best way to find this North Star and to hone in on what’s mission critical for your company is to use what I call the 5 P’s Framework for Sustainable Value Creation: Priorities, Pilots, Partnerships, Products, and Process:
If you use the framework, you will be able to preempt the forces and get critical buy-in from your senior leadership so there isn’t any wavering during turbulent times that cancels out moves and changes the North Star. The conversation time and time again has to be about focusing on business value. Business value is what's going to be your safety net. It's going to keep you moving forward for the next two, five and 10 years, aligning with existing goals. Strategy is not independent of sustainability strategy, they must be aligned together.
I am very positive that CSOs can navigate these forces. Full stop. However - CSOs must ensure that they are changing with the times, just as the times are changing our companies.
Need guidance on how to further strengthen your sustainability or ESG strategy for 2025? My team and I can assist you to engage with the Board, partner with your internal peers, and engage with your suppliers. See our services at www.pagitsasadvisors.com Reach me at chrissa@pagitsasadvisors.com and Christine Boyd, Chief Growth Officer, at cboyd@pagitsasadvisors.com.
Have questions or comments about how your organization is managing the impacts of uncertainty? Share with me and readers in the comments on LinkedIn.
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