Josh Strauss
The biggest thing I took away from attending a recent global sustainability summit, a room filled with hundreds of CEOs and chief sustainability officers, was uncomfortable: many companies are quietly pulling back on climate action.
It's not hard to see why. The war with Iran and the energy and supply-chain shocks that have followed have put real pressure on business leaders. Add to this a political environment that not only doesn’t reward environmental action but might actually penalize it, and it’s understandable why some companies are reassessing priorities or are waiting for clearer standards before making their next move on climate. As a result, credit buyers have been hesitant to transact, and demand in the voluntary carbon market has softened.
I understand these pressures. I face them in my business as well, but pulling back on climate action now is the wrong move at the wrong time.
Companies will always face competing priorities and risks. There will always be financial uncertainty, geopolitical instability, and evolving regulations. There is never a perfectly calm moment to invest in the future.
Climate change, however, doesn't pause while businesses wait for optimal conditions.
The physical impacts are becoming harder to ignore. Extreme weather is disrupting supply chains.¹ Energy systems are under strain.² Insurance costs are climbing,³ and water availability is becoming a real constraint in more regions.⁴ These aren't future challenges; they're business challenges today and, unlike much of what dominates the headlines, climate risk compounds. The longer we wait, the harder and more expensive it becomes to address. Given this reality, it’s not surprising that investing in climate solutions today can often make plain business sense when the longer view is considered.
The business case is increasingly clear: efficiency improvements cut costs directly, and a growing body of research links strong environmental performance with stronger financial results over time.⁵ Even in hard-to-abate sectors, progress can be achieved. In maritime shipping, for instance, ship owners are beginning to move from heavy fossil fuels toward lower-carbon alternatives like bioLNG and renewable diesel, getting ahead of tightening regulations and reducing their long-term exposure to a fuel that's only going to face more cost pressure.
Other industries can (and should!) take the cue from these types of proactive measures. Just because we are currently in an environment with low accountability for corporate climate goals does not mean this will always be the case. Just because a company’s climate exposures might seem temporarily out of sight doesn’t mean they are gone.
In addition to firms addressing direct emissions, high-quality carbon credits play an important role in the fight to stem climate degradation, and there's a business case to use them well, not just a moral one. A growing number of leading companies now set an internal price on carbon, and research consistently links such disciplined environmental management to stronger financial performance over time.⁵ The pattern is consistent: companies that treat carbon as a managed cost rather than an afterthought tend to be well-run companies. Credits are how those companies address the emissions they can't yet eliminate economically.
And I'll be direct, because it's my field. The carbon market has matured. The historic problems were real: weak oversight and a handful of bad projects damaged trust across the category. There’s now a clear bar for credibility, with the Core Carbon Principles from the Integrity Council for the Voluntary Carbon Market being the leading example of such standards. These integrity requirements, alongside a robust set of technologically advanced tools to affirm the tenets of being real, additional, conservatively measured, and counted only once, support a level of credit quality far superior to that previously seen in this market. And one of the clearest signals yet that the market has matured came just recently, when the Science Based Targets initiative released version 2.0 of its Corporate Net-Zero Standard. For the first time, this SBTi standard gives high-quality carbon credits a formal complementary role in net-zero pathways, recognizing companies that take responsibility for their ongoing emissions through carbon credit investments made after internal emissions reductions options are exhausted.
The broader point: when it comes to climate action, companies don't have to choose between navigating today's challenges and preparing for tomorrow's. The businesses that come out of this period the strongest won't be the ones waiting for perfect conditions. In fact, my experience indicates quite the opposite - those that wait for perfect certainty almost always end up paying more. Instead, success, both financial and environmental, will be marked by those that took the long-term view and kept going, building resilience, managing risk, and investing in their long-term competitiveness, even while others hesitated.
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Sources
- Everstream Analytics, 2026 Annual Supply Chain Risk Report — ranked extreme weather as the second-largest threat to global supply chains, behind only geopolitical tension. For a peer-reviewed alternative with a cleaner primary link, Bruegel Working Paper 20/2025, Climate Risks to Global Supply Chains, finds indirect climate losses passing through supply chains can be up to five times larger than the direct damage (bruegel.org/working-paper/climate-risks-global-supply-chains).
- International Energy Agency, Electricity 2025 — extreme weather including storms, droughts, and heatwaves drove widespread power disruptions in 2024, with drought-reduced hydropower straining systems worldwide (iea.org/reports/electricity-2025/executive-summary).
- Aon, via the World Economic Forum (August 2025) — insured losses from natural catastrophes reached $100 billion in the first half of 2025, 40% higher than the same period in 2024 and more than double the 21st-century average (weforum.org/stories/2025/08/global-insurance-industry-gap).
- OECD (2025), Embedding Water-related Risks in Financial Stability Frameworks — drought-related losses are rising 3–7.5% per year globally, and an average drought event in 2025 could be up to six times more costly than one in 2000 (oecd.org). For an asset-exposure angle, a BlackRock analysis using World Resources Institute data projected that 60% of the 84,000 REIT-owned properties it mapped will be in water-stressed regions by 2030.
- NYU Stern Center for Sustainable Business & Rockefeller Asset Management, ESG and Financial Performance (Whelan et al., 2021), a meta-analysis of 1,000+ studies finding a positive ESG–financial performance link in 58% of corporate studies, with only 8% negative and the effect more pronounced over longer horizons. See also Eccles, Ioannou & Serafeim, "The Impact of Corporate Sustainability on Organizational Processes and Performance," Management Science (2014), which found high-sustainability firms outperformed peers over an 18-year period. On the adoption of internal carbon pricing specifically, CDP's 2025 disclosure data shows more than 5,900 companies now use or plan to use an internal carbon price, up 89% between 2021 and 2024 (per WBCSD analysis of CDP data).