CEOs still buy the business case for sustainability, despite Trump’s climate changes

Good morning. Here’s a secret: Most CEOs believe climate change is real. They have to deal with it to stay profitable, run stable operations, and stay relevant to their customers and employees. Texas leads the nation in producing fossil fuels and renewable energy, in part because everyone knows the state’s power grid needs all the help it can get. Every time there is a breakthrough that could reverse corporate action on climate change, from the Supreme Court 2024 revision of the Chevron doctrine to the US Department of Energy stunning report last year when global warming was downplayed, i checked with leaders to see if they changed their strategy. The answer is they are not.

That fact was reinforced yesterday when I called for a reaction to the Trump administration’s termination of the 2009 hazard finding that gave the Environmental Protection Agency the legal duty to regulate six greenhouse gases that endanger human health. “It’s a pattern we’re seeing repeated in Washington,” one manufacturing leader told me. “We can’t plan around election cycles.”

This person and others expressed concern that a Supreme Court challenge could permanently damage the EPA, creating an uneven playing field while reducing incentives to curb greenhouse gases at a critical time for the planet. Energy reporter Jordan Blum noted that it could extending the life of existing coal plants but also found the whole the business impact is likely to be limited. The difference is that, in this political climate, many leaders don’t want to go on the record about what they do.

So let’s hear from Saleh ElHattab, the CEO of Gravity Climate, a software platform that helps companies measure, report and reduce their greenhouse-gas emissions while cutting energy costs. Business is booming for reasons other than regulation. “Industrial buyers have the thinnest margins in the world,” he told me yesterday. “If you have an HVAC system that can be optimized, or we find some older assets or opportunities for financing to get something that’s 90% more energy efficient, that’s good for business.”

A growing number of states and local governments are also regulating greenhouse-gas emissions. But there is also a lot of action from the private sector. Many players want Apple, Walmart and Amazon led the push for vendors to disclose their own carbon footprints, creating self-reinforcing ecosystems that are resilient. Companies are also increasingly disclosing their carbon emissions due to investor pressure, consumer demand and initiatives such as the Carbon Disclosure Project.

And now there’s AI. While there is legitimate concern about energy needs and impact on data centers, AI can also be a factor in reducing emissions. I recently spoke with Samsara CEO Sanjit Biswas, whose platform helps customers run their fleets, factories and other physical operations more sustainably by connecting farm hardware to the cloud. “Many executives don’t know what’s possible,” Biswas told me, noting that digitized operations mean even small changes can cascade to make a significant reduction in emissions, safety and the bottom line. “It becomes stakes on the table.”

Amidst the scientific and regulatory blows—and there have been many—the business case for sustainability remains strong.

CEO Daily will be off Monday for Presidents Day. We’ll be back in your inboxes this Tuesday.

Contact CEO Daily by Diane Brady at [email protected]

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