In response to Donald Trump’s re-election in late 2024, many American companies have been purging their own hard-earned ESG credentials.
However, this shift away from taking responsibility for environmental, social, and governance business impacts could have a detrimental effect on the US economy. Failure to address climate change could damage food security and destabilise the global financial system; backtracking on social issues will hinder innovation and growth; and removing regulations focused on corporate governance will see malpractice proliferate and the economy suffer accordingly.
In other words, efforts to exorcise sustainability and ethics from the US are unlikely to bring down the price of eggs.
Trumpism is pitting the economy and ESG against each other
Since the beginning of his 2024 campaign, Donald Trump has focused on the economy. While some of his actual policies—his tariffs, for example—seem to run counter to this, Trump’s messaging has consistently focused on improving economic conditions for working-class people. One of the Trump-Vance campaign’s major grievances with the former administration was the price of eggs.
Trump’s solution to the US’s economic struggles has been to cut any spending on ESG matters, which he views as unnecessary. Essentially, he wants diversity, equity, and inclusion (DEI) coordinators fired, spending on environmental programs axed, and ethics regulators defanged—or put down.
Already, the Trump administration and Elon Musk’s ‘Department of Government Efficiency’ (DOGE) have made steps towards these goals. The US’s retreat from the 2015 Paris Agreement on climate change has been announced (for the second time), and many government employees with DEI in their job descriptions have been put on indefinite leave.
Companies outside of government control have followed suit on ESG
Corporations in the US began to imitate Donald Trump’s take on ESG well before he re-entered office—a trend that has increased in prevalence since his inauguration. In March 2025, the Financial Times found that US multinational retailer Walmart had cleansed its website of mentions of climate change.
In terms of social factors, many companies have also dropped or diluted their DEI commitments. Examples include Meta, McDonald’s, Amazon, and Target. On the corporate governance side, massive cuts to the public sector and the slashing of regulations mean that companies are likely to face far less regulatory scrutiny.
The combined effort of the US government and companies to do away with ESG will have a major impact on the economy—but not in the way Trump’s campaign slogans would have us believe.
Slashing environmental efforts will have devastating impacts
Just because the politically savvy move in the US is to ignore climate change does not mean the threat will go away. Climate collapse will devastate global food systems and eviscerate natural capital, with serious implications for the US economy specifically.
Another impact of companies sidelining environmental concerns is that they will not be factoring climate change into their risk management. Insurance companies will not make the same mistake forever, and there may eventually come a point where nobody is willing to insure some of the world’s largest companies. While this outcome is not a certainty, if it did occur, the global economy could suffer an unprecedented crisis.
Ignoring DEI will have serious consequences for the labour market
The US economy will suffer if social matters are forgotten. Abolishing DEI initiatives that support a diverse range of people in the workplace will destabilise the labour market and entrench systemic inequalities that society has attempted to purge for decades. This violent policy swing will result in businesses bringing in very few new ideas or perspectives and some of the best job candidates being locked out by socioeconomic barriers. The result will be businesses—and therefore the economy—stagnating.
Deregulating corporate governance could drive malpractice
By abandoning good corporate governance and its enforcement by regulators, the US economy could become a hub for malpractice to proliferate. While this may make a small number of people lots of money in the short run, it will backfire in the long run. Ruthlessly cutting supposed red tape will allow bad actors to take advantage and damage the free market model. All in all, the US’s new-found refusal to take responsibility for ESG matters could seriously harm its economy.
