President Trump has issued a sweeping executive order aimed at halting state-level climate regulations, a decision that could reshape the future of corporate sustainability across the US. The Trump climate change order, “Protecting American Energy from State Overreach,” directs the US Attorney General to identify and challenge laws or lawsuits that penalise fossil fuel companies, impose carbon caps, or reference ESG frameworks. Keep reading as we dive deeper into this and how the organisations that implement robust business sustainability strategies will be the leaders of tomorrow.
What the Trump climate change order involves
The executive order, signed on April 8, 2025, calls for the US Department of Justice to intervene in state laws and legal actions deemed to “overstep federal authority” by regulating domestic energy production or penalising historic emissions. The order specifically targets:
- State-led climate liability lawsuits against fossil fuel companies
- Cap-and-trade schemes like California’s
- Climate-related taxes or carbon caps
- ESG-related legislation and environmental justice policies
States including New York, California, and Vermont are directly named, all of which have introduced aggressive climate policies in recent years. Trump’s directive argues that such measures undermine energy affordability, disrupt national economic priorities, and “unconstitutionally project” state regulations across the country.
While framed as a defence of energy freedom and economic growth, the order is already triggering legal and political backlash. Several governors have pledged to challenge the order’s legality, citing states’ rights under the Tenth Amendment.
Environmental groups warn that halting these laws would erode climate accountability and set a dangerous precedent for federal overreach. The executive order also directs the Attorney General to report back within 60 days, meaning legal action against states could follow as early as this summer.
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Implications for businesses
For businesses operating across state lines, the uncertainty introduced by the Trump climate change order adds another layer of complexity to an already volatile regulatory landscape.
Legal uncertainty and compliance risk
Companies must now prepare for possible reversals in state-level obligations and new federal interventions. This complicates long-term planning, particularly for businesses investing in climate compliance, clean energy, or sustainable supply chains.
Pressure from stakeholders remains
While legal requirements may be in flux, the pressure from investors, customers, and employees remains steady. BlackRock, CDP, and other leading voices continue to demand emissions disclosures and science-based targets, regardless of political shifts. Businesses that stall progress may face reputational and financial risks.
Inconsistent market signals
This order follows closely on the heels of the Trump tariffs, which were imposed and then quickly paused, causing sharp market reactions and exposing vulnerabilities in global supply chains. Together, these moves signal a volatile and unpredictable policy environment. Organisations that have embedded sustainability into their value proposition—whether through net-zero goals, sustainable procurement, or ESG integration—now face a patchwork of regulatory expectations.
Conclusion – A fork in the road for climate leadership?
While the Trump climate change order represents a significant federal pushback against climate accountability, it also reinforces a larger truth: waiting for stable policy is no longer a viable business strategy. The reality is that environmental, social, and governance issues remain central to risk management, reputation, and long-term value. Markets, not just policymakers, are demanding climate alignment.
Ultimately, the organisation that comes out strong will be those building resilience, embedding sustainability into decision-making, and continuing to act with purpose despite the noise. Explore our online corporate sustainability training to gain the knowledge and tools needed to navigate shifting regulations and lead on sustainability from the inside out.
