In the past 18 months, many companies have initiated a sobering retreat from their prior commitments to sustainability, related to both the environment and people. In June 2024, for example, Tractor Supply Co., a $14 billion agriculture, livestock, and pet care retailer, announced that it was eliminating all jobs focused on diversity, equity, and inclusion and withdrawing its carbon-emissions goals. The company previously had targeted achieving net zero emissions in operations by 2040, as well as to increase people of color in managerial positions and above by 50%. In the same week, Canada’s six largest oilsands companies wiped their websites clean of their decarbonization goals. The month before, as part of a company-wide expense reduction, Nike laid off dozens of sustainability managers.
Companies Are Scaling Back Sustainability Pledges. Here’s What They Should Do Instead.
In the past 18 months, many companies have significantly retreated from their sustainability commitments. High-profile examples include Tractor Supply Co., which eliminated jobs focused on diversity and withdrew its carbon-emissions goals, and Canada’s major oil sands companies, which removed decarbonization goals from their websites. Nike and others have similarly reduced their sustainability efforts. This trend is largely driven by political opposition to ESG initiatives, underperformance of ESG funds, and challenges in justifying sustainability investments due to intangible benefits. To counter this retreat, companies must replace unrealistic targets with meaningful actions, rethink supplier relationships, rebalance investments considering future ecological costs, and reshape governance structures to ensure accountability and expertise in sustainability initiatives.