Climate, reputation and a new era of corporate diplomacy: How can corporate affairs leaders navigate these unchartered waters?

For many years sustainability programmes, climate targets and ESG commitments were relatively safe territory for global corporates.  

For those that had an authentic and genuine story to tell, they’ve been able to showcase the meaningful impact their business was making to society and extol their part in tackling the environmental challenges facing our planet. And for others it presented an opportunity to gain reputation kudos and currency among stakeholders who were increasingly demanding corporates step up to the plate on climate and social causes.  

For others that may have been suffering commercially or had experienced a downturn in share price, a pivot to sustainability – however cynically – offered something of an out, a reminder that businesses aren’t all about shareholder value, but guided by a bigger purpose and social value.   

However, in 2025 the landscape has changed, almost beyond recognition. In little over a month, the 47th president of the United States has sent shockwaves all over the world and created a plethora of new challenges for corporate affairs and communications to navigate.  

We’ve already seen a rollback of DEI initiatives and commitments from the world’s biggest companies. Now many firms are tentatively walking down from ambitious climate and net zero goals, and adjusting their ESG linked executive remuneration policies – which only a few years ago would’ve put them firmly on the ‘right side’ of the debate in the eyes of many.  

For corporate affairs leaders, this now creates an inherent tension and brings to the fore potentially conflicting priorities.  

On the one hand they will be thinking very carefully about managing the message on sustainability against political headwinds from the US, and on the other staying aligned with Europe; where there is a requirement to align with the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). Not to mention, the potential scrutiny from other important corporate stakeholders – customers, commercial partners, NGOs and other activist groups – who may criticise any attempt to ‘row’ back on climate commitments and jump on an sign of Trump ‘appeasement’.  

CEOs naturally will be very cautious on all their public messaging on this topic – be it media interviews, results calls or other public appearances. It’s no longer a case of managing reputation and public scrutiny, but a wrong step on climate could potentially see them in the firing line commercially. Potentially, an adverse reaction from the U.S administration could impact competitiveness, disrupt supply chains or lead to regulatory or trade barriers, which could have severe ramifications on the bottom line. These leaders, naturally, have a very real responsibility to their businesses and the many people they employ.   

Corporate diplomacy is, therefore, very much the skillset in the CEOs arsenal that is in most demand right now.  

What can corporate affairs leaders and their advisers do to help navigate these unchartered waters?  

1. Gain a holistic of understanding of priorities across the business.  

Before taking action, its critical to gain a thorough understanding of the picture across the business when it comes to sustainability, climate and ESG – and align corporate reputation, sustainability, IR and governance priorities accordingly.  

• Do you have an insight into the expectations of all your corporate stakeholders when it comes to communications on climate and ESG?  

• Do you have detailed intelligence on the make-up of your shareholder register?  

• Are you alert to activist action?  

• Are your policies and commitments aligned with corporate governance and reporting requirements?  

A joined up approach is not only advised, in today’s world it’s critical.  

2. Intensely prepare for all appearances for CEOs and company spokespeople 

It stands to reason that preparation is key for all engagements – both internal and external, but in today’s news agenda there’s an even greater imperative. Everything from results calls, internal town halls to product launches can be quickly derailed by questions on sustainability and climate or a view on the Trump presidency. Internal memos or messages can very quickly become the touch paper for a media storm or social media pile on. 

This is where robust messaging and evidence is key. If there is a need to adjust climate programmes, then corporates that have measured and justifiable reasons for doing so that stand up to scrutiny will be the ones that emerge the least scathed.  

3. Make sure you are politically aware across your geographical exposure 

The U.S agenda is naturally the loudest and most dominant in global affairs right now. But it’s important that corporate affairs leaders don’t solely focus on the rhetoric from Capitol Hill. Relationships with policymakers in other markets may remain just as, if not more important depending on the nature of the business and geographical mix. Again, corporate affairs teams need to work with executives to delicately navigate the shifting sands of geopolitics, to avoid creating an issue that could prove detrimental to their licence to operate in either their home market or key trading territories. Political intelligence and valuable insight can be the difference between walking into a diplomatic incident or bridging the political divide between geographies.  

The road ahead 

Navigating the complex, ever-changing dynamic of shareholder and stakeholder interests has never been so important. There are likely to be many twists and turns in the months ahead, not least in the next four years.  

The businesses that are able anticipate issues, communicate effectively and make more informed decisions will be the ones that succeed.