Has the business case for climate diminished in the last five years?
At first glance, the answer feels almost too obvious. The Trump-era political zeitgeist is deeply unfavorable to anything climate related. And the language of ESG has disappeared from corporate America.
But when I posed the question to investors, corporate executives, and consultants at the Aspen Institute’s Business & Society Summit this week, there was no clear consensus. Some argued that the business case had become stronger. Others said it had simply become more focused. A few maintained that it remained as challenging as ever.
At a macro level, the financial argument for companies has become more robust. The energy affordability and security challenges triggered in part by the Iran war and the growth in data centers’ electricity demand have bolstered the argument for clean technologies originally developed to cut emissions. And climate events, from heat waves in Europe to fires in the U.S., have shown the need for investments in adaptation and resilience.
“If you are interested in being an important part of the future economy,” says David Young, senior advisor at BCG and executive managing director of decision intelligence and innovation venture firm CascAIdient, “you’ve got to be making the stuff that will be part of the future infrastructure of global growth.”
And yet several participants said that it remained challenging to connect the big picture economic case with the day-to-day business decisions facing executives. No matter the long-term direction of travel, a manufacturer of low-carbon materials, for example, still faces the familiar question: if the product costs more and performs the same, who will pay for it?
But among those who saw a strengthened business case there was a point of agreement: climate change and the transition to a cleaner economy has become embedded in competitiveness rather than existing as a standalone climate agenda.
The roundtable I hosted on the business case for climate was just one event on a crowded calendar in Aspen covering a range of issues connected to how business engages with society. (While the rest of the summit was held under Chatham House Rule, this roundtable session was on the record).
The conversation reinforced something I’ve increasingly heard from executives over the past year. Political backlash in the U.S. has undoubtedly made climate work harder. But the bigger shift has been a demand to demonstrate business value.
In areas where the return on investment is clear, climate work continues to move forward. That’s particularly true in energy, where clean technologies have boomed over the last few years as a consequence of investment in AI. In other cases, key stakeholders—including investors and customers—have kept companies from fully retrenching on climate. But in the absence of a clear business case, top executives have pulled back.
Roundtable attendees, representing organizations in fields ranging from finance to construction to energy, broadly agreed that companies were moving past the era of big targets and instead focused on actual opportunities for implementation.
“Every company should probably be all-in in some dimension,” said Ramsay Huntley, a former sustainable finance executive who now advises on sustainability strategy. “But to say they were going to reframe the entirety of the company… that was one of the big myths.”
Indeed, the business case for climate isn’t about decarbonization or really even climate at all in most situations. Instead, it centers on growth and competitiveness. The more that reality sinks in, the more we can expect private companies to actually commit to climate-related investments.
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