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How the anti-ESG movement is reshaping corporate sustainability reports

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07 Jul, 2025

This post was originally published on Green Biz

Source: Green Biz

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Here’s a counterintuitive truth: just as sustainability reports became ubiquitous — 90 percent of S&P 500 companies publish detailed ESG disclosures — they also became controversial. The anti-ESG backlash has turned what seemed like straightforward progress in companies reporting on their sustainability efforts into a complex strategic puzzle. And that’s created an unexpected paradox for investors: Sustainability reports may be more valuable than ever, but for entirely different reasons than their creators intended.

The scale and impact of political pressure

The numbers reveal a dramatic investor retreat. ESG funds suffered significant withdrawals in the first quarter of this year, with more than $8 billion globally being taken out and $6 billion of that from U.S. investors alone. Shareholder resolutions dropped this proxy season, with 25 percent of filed proposals failing to reach ballots due to higher regulatory bars that now require proponents to demonstrate ESG issues and company efforts are “significant and economically relevant.”

The linguistic retreat in company reports is equally striking. Research from AlphaSense shows DEI mentions dropped nearly 70 percent  at U.S. firms, while climate change references fell 30 percent. Companies are in full-on “green-hushing” mode, maintaining sustainability programs while avoiding explicit ESG language.

Yet corporate sustainability reporting hasn’t decreased. If anything, it’s become more detailed and standardized, driven by regulatory requirements that persist despite political pressure. The U.S. Security and Exchange Commission’s March decision to stop defending climate disclosure rules has created a complex landscape where some companies continue detailed environmental reporting while others scale back.

The hidden value in corporate contradiction

The anti-ESG movement has inadvertently created a natural experiment revealing which companies are genuinely committed to sustainable practices versus those simply following trends. This filtering effect generates more reliable ESG investment signals because it helps investors determine which companies are virtue-signaling as expedient versus those genuinely on a path toward improved outcomes for people and planet.

Consider persistence: 79 percent of Russell 3000 companies receiving shareholder resolutions this year have faced them in the past five years. This concentration suggests activist investors continue targeting the same firms — either companies with persistent governance issues or those representing particularly impactful engagement opportunities.

More telling is what survives. Greenhouse gas emission-related resolutions remain among the most common shareholder proposals despite the overall environmental proposal decline. These surviving initiatives primarily request enhanced disclosure on emissions reporting, climate transition plans and progress on reduction strategies, which suggests climate concerns retain core investor interest even amid political pressure.

Companies maintaining robust sustainability reporting despite potential backlash signal something crucial about their long-term strategic thinking. They’re essentially saying, “We believe these practices create value regardless of political fashion.” Studies show companies that maintained ESG commitments during politically motivated pressures and scrutiny tend to have stronger financial performance over longer horizons; not necessarily because ESG practices directly drive returns, but because maintaining consistent strategic direction despite external pressure correlates with management excellence.

Reading between the lines

The anti-ESG environment has also made sustainability reports more informative by forcing companies to demonstrate actual value rather than virtue signal. When every disclosure carries potential political costs, only strategically important initiatives survive the regulatory gauntlet.

Smart investors now read these reports like organizational psychologists. A company quietly implementing water conservation measures while avoiding climate rhetoric tells a different story than one prominently featuring carbon neutrality goals despite potential backlash. Both might create value, but through different strategic approaches reflecting different risk tolerances and stakeholder priorities.

The SEC’s heightened standards may have inadvertently improved sustainability initiative quality. Companies can no longer rely on superficial commitments — every disclosure must justify its strategic importance. This creates a more rigorous framework where sustainability reports reveal organizational capabilities rather than corporate values.

What’s more, the backlash has fundamentally changed activist investor approaches. While total proposals declined, the focus has shifted from environmental advocacy to governance mechanisms. Companies receiving five or more proposals dropped from nearly two dozen in 2024 to just 10 in 2025. Activists are becoming more selective, focusing resources where they can demonstrate clear business cases.

Crucially, much engagement has moved behind closed doors. As Milla Craig of investor consulting firm Millani notes that investors aren’t backing off on the integration of ESG; they’re having these conversations privately rather than through public proxy battles. This shift from public confrontation to private engagement may prove more effective, allowing companies to address concerns without headline risk.

The bottom line

Political pressure has created a paradox: by making sustainability costly to discuss, it may have improved ESG investing by forcing companies to demonstrate genuine business benefits rather than good intentions. The result is a more nuanced framework for using sustainability reports in investment decisions.

Valuable reports now clearly connect environmental and social practices to business outcomes — how water efficiency reduces costs, employee engagement improves productivity or supply chain transparency reduces regulatory risk. This shift has made sustainability reports more rigorous and valuable for fundamental analysis.

The key insight: Focus less on what companies say about their values and more on what their actions reveal about strategic thinking and operational capabilities. When companies maintain environmental disclosures despite potential backlash, it’s likely because those practices are genuinely integrated into operations. When they abandon initiatives at the first sign of pressure, that reveals strategic commitment and risk management capabilities.

For investors, the lesson is clear. Sustainability reports remain valuable sources of investment intelligence, but their value comes from organizational insights rather than corporate virtue signaling. In a world where every disclosure carries political risk, only the most strategically important information survives — and the most valuable conversations may be happening behind closed doors rather than in public proxy battles.

The post How the anti-ESG movement is reshaping corporate sustainability reports appeared first on Trellis.

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Embedding environmental stewardship into IT governance frameworks

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Integrating environmental stewardship into IT governance frameworks has become essential as businesses increasingly prioritise sustainability. IT operations contribute significantly to carbon emissions, energy consumption and electronic waste (e-waste). Organisations that embed environmental responsibility into their IT governance can reduce their ecological footprint, improve operational efficiency and strengthen their brand reputation.

Erica Smith, chief alliance officer and environmental, social and governance lead, Blue Connections IT, said, “Environmental stewardship supports financial performance, risk mitigation and brand differentiation. With rising energy costs, increased consumer demand for sustainable products and services, and growing pressure from investors and regulators, companies can no longer afford to overlook their environmental responsibilities.

“Poor sustainability practices in IT can lead to high operational costs, supply chain risks and reputational damage. Conversely, a proactive approach improves efficiency, attracts environmentally conscious customers and helps future-proof businesses against evolving policy and regulatory changes.

“Integrating environmental responsibility into IT governance integrates sustainability initiatives into decision-making systematically. Organisations can reduce waste, lower energy consumption and extend the lifecycle of technology assets while positioning themselves as responsible leaders in an increasingly climate-aware market.”

There are four key areas that present opportunities to embed environmental stewardship into IT governance frameworks.

1. Device lifecycle management

A structured approach to managing the lifecycle of IT assets ensures devices are deployed efficiently, maintained properly and retired responsibly at the end of their useful life. Embracing a circular economy model, where equipment is refurbished, reused or ethically recycled, can significantly reduce e-waste and resource use. Companies that adopt this approach lower their environmental impact and unlock financial value by extending the lifecycle of IT assets.

Smith said, “Effective asset recovery strategies further support sustainability efforts. Integrating secure data erasure and refurbishment into IT governance policies lets businesses repurpose functional devices within the organisation or resell them to external buyers. Responsible e-waste recycling also supports companies to process materials ethically in instances where resale is not viable, reducing landfill contributions and preventing environmental contamination. The adoption of industry-certified data sanitisation methods also safeguards compliance with security and privacy regulations.”

2. Sustainable procurement

IT governance frameworks should prioritise the selection of technology vendors and partners committed to sustainable manufacturing, responsible sourcing and energy-efficient product design. This includes favouring IT hardware with a high percentage of post-consumer recycled materials and using minimal packaging. Additionally, employing Device-as-a-Service (DaaS) models optimises IT asset utilisation while reducing upfront investment and unnecessary hardware purchases.

Partnerships with sustainability-driven IT service providers can further enhance an organisation’s environmental impact. Working with partners that offer end-to-end IT asset management solutions, encompassing secure device deployment, certified data sanitisation and ethical recycling, simplifies the process of aligning IT operations with sustainability goals. Companies that prioritise environmental stewardship in their IT governance framework gain a competitive advantage by demonstrating their commitment to responsible business practices.

3. Energy consumption

Data centres, cloud services and enterprise networks require substantial energy resources, making green IT practices essential. IT governance frameworks should include policies to reduce consumption by optimising server efficiency, reducing redundant infrastructure and using renewable energy sources. Cloud providers with strong sustainability credentials can support carbon reduction initiatives, while virtualisation strategies can consolidate workloads and improve overall energy efficiency.

4. Employee engagement

Educating staff on sustainable IT practices, such as energy-efficient device usage and responsible e-waste disposal, creates a culture of accountability. Organisations that implement green workplace initiatives, such as responsible end-of-life disposal programs, reinforce their commitment to sustainability at all levels.

“IT governance must also align with corporate environmental, social and governance commitments. Companies can contribute to broader sustainability objectives by embedding environmental stewardship into IT policies, such as net-zero emissions targets and responsible supply chain management. Clear reporting mechanisms and regular sustainability audits aid transparency, letting businesses track their progress and demonstrate accountability to stakeholders,” Smith said.

Government regulations and evolving industry standards are increasingly shaping the sustainability expectations for organisations. Aligning IT governance frameworks with best practices for environmental stewardship keeps companies ahead of regulatory requirements. Proactive adoption of sustainable IT practices positions businesses as industry leaders in environmental responsibility.

Smith said, “Integrating environmental stewardship into IT governance frameworks is not just about meeting compliance obligations; it’s about futureproofing company operations and prioritising the broader environment. Taking a proactive approach to sustainability lets organisations drive efficiency, reduce long-term costs and contribute to a healthier planet. Businesses that lead in sustainable IT governance will be well-positioned for long-term success as environmental concerns continue to shape consumer and corporate priorities.”

Image credit: iStock.com/Petmal

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