While global players are making progress, the U.S. is retreating from regulation
The urgency of climate action is intensifying, yet a stark contrast emerges between the evolving international regulatory landscape and recent U.S. policy reversals. While global players like the European Union (EU) are establishing comprehensive sustainability standards, the U.S. is retreating from climate leadership and creating significant challenges for businesses, particularly those with global operations.
The U.S. faces a setback in climate regulation. Recent executive orders have reversed key climate policies, halting funds for clean energy projects and withdrawing support for the Paris Agreement. The dissolution of the Interagency Working Group on the Social Cost of Greenhouse Gases removes a critical tool for evaluating the long-term economic impacts of carbon emissions.
Furthermore, the suspension of environmental initiatives under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act could delay investments in renewable energy infrastructure, such as electric vehicle charging networks. These policy shifts, coupled with efforts to dismantle the Environmental Protection Agency’s authority to regulate greenhouse gas emissions, risk undermining U.S. businesses’ ability to compete globally in the transition to a low-carbon economy.
The decision to pause offshore wind energy leasing and review federal permitting processes for wind projects further complicates the outlook. While these measures claim to address inefficiencies, they create uncertainty for businesses aiming to invest in renewable energy and align with international standards.
In stark contrast to international progress, the international regulatory environment is rapidly evolving. The EU, leading the charge, has introduced landmark frameworks like the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Deforestation Regulation (EUDR). These directives, along with the Green Claims Directive (GDC), set rigorous standards for corporate sustainability. The CSRD, entering its first active reporting year in 2025, demands granular, verifiable data on sustainability performance, a significant challenge for many companies.
Efforts are underway to consolidate these EU regulations into a unified Environmental, Social, and Governance (ESG) framework, aiming to streamline compliance. However, concerns remain about losing the specificity these directives provide. Beyond the EU, global initiatives like the Science Based Targets initiative (SBTi) and the forthcoming ISO Net-Zero Standard are redefining corporate climate accountability. Meeting these evolving standards requires significant investment. Companies must invest in advanced data infrastructure, including AI-driven tools for predictive modeling and supply chain optimization. Moreover, frameworks like Article 6 of the Paris Agreement and biodiversity-focused initiatives underscore the need for integrated climate and nature strategies, presenting both compliance challenges and opportunities for leadership.
This widening gap between international and U.S. climate regulations poses significant risks for New Hampshire and U.S. businesses. Companies operating in the EU or other jurisdictions with robust climate policies may find their U.S.-based operations falling behind in compliance and innovation. The impact may even extend to small companies within the supply chains of larger companies operating in EU markets. This divergence complicates strategic planning, forcing businesses to navigate conflicting priorities while managing regulatory uncertainty at home.
To remain competitive, U.S. companies must proactively address these challenges. This includes adopting robust climate transition plans, investing in resilient data systems, and aligning their operations with emerging international standards.
The regulatory landscape for climate action is rapidly evolving. While international frameworks advance transparency, accountability and sustainability, U.S. policy reversals threaten to stifle progress. For U.S. businesses, the path forward demands strategic foresight, investment in data-driven solutions, and a commitment to aligning with global sustainability goals.
By embracing these principles, businesses can turn challenges into opportunities, ensuring resilience and competitiveness in a rapidly changing world.
Zeina Eyceoz is deputy director, New Hampshire Businesses for Social Responsibility (NHBSR.org). NHBSR produces Sustainability Spotlight monthly for NH Business Review.
