An idea that has been fiercely debated for decades, the current version of the toll imposes a $9 charge on passenger vehicles entering Manhattan below 60th Street. Motorcycles are charged less, while sightseeing buses and trucks pay more. 

“We’ll unclog our streets, reduce pollution and deliver better public transit for millions of New Yorkers,” New York Governor Kathy Hochul said at a press conference in November, as her administration hustled to implement the charge before President Donald Trump, a strong critic of it, took office. This month, he indicated again that he hoped to quash the levy, telling the New York Post that it is “really horrible” and “destructive to New York,” despite early evidence to the contrary about less bumper to bumper traffic. It also faces lawsuits from a teachers’ union and New Jersey State, which oppose the plan. 

Congestion pricing isn’t new. Singapore was the first city to impose it, in 1975. Since then, London, Stockholm, Milan and Gothenburg have adopted schemes intended to reduce pollution, alleviate snarled traffic and generate much-needed funds for transit infrastructure. The most famous of the congestion charges, in London, has delivered notable results. In 2023, 20 years after its implementation, officials reported that it had sparked a “quiet revolution” in the British capital, reducing congestion by 30%, driving the number of vehicles in the affected zone down by 18%, boosting bus travel in Central London by 33% and playing a role in a 10% increase in walking, cycling and transit journeys. 

New York’s transit authority expects the congestion charge to cut traffic by 17% in the affected zone. In recent years, driving in the notoriously congested city has gotten worse, with speeds declining some 23% between 2010 and 2019 in Manhattan, or from 9.1 miles per hour to 7.1, according to project proponents. Gridlock has aggravated air and noise pollution and has made it even more difficult for emergency vehicles to get where they need to go. 

The congestion charge is also critical to funding the largest capital plan in New York City history, allowing the Metropolitan Transportation Authority to access $15 billion in bonds to fund a subway extension to East Harlem, upgrades to signal systems on various subway lines, accessibility improvements at more than 20 stations, and hundreds of new electric buses. Money is being earmarked for “air quality and environmental justice” initiatives, including asthma centres in the Bronx, charging stations for electric trucks, air filtration units for schools located near highways, and $25 million for park upgrades. 

But getting here required a fight, and may still. New Yorkers have floated the idea of a congestion charge since the 1950s. In June, the city was poised to make it a reality with a proposal to impose a $15 charge for passenger vehicles. But at the last minute, Hochul intervened, shelving that plan and shocking proponents. The governor’s decision was at least partially based on concerns that it could deter people from driving to New York City when it was still in the midst of an economic recovery, although The New York Times reported that the decision was tainted by politics, an attempt to give Democratic districts where congestion pricing is unpopular a little boost. Local groups filed a lawsuit hoping to revive it.

At the time, Hochul defended the move as one intended to avoid placing more burden on working and middle-class families. When introducing the new plan, in November, she emphasized the lower price.

Before taking office, Trump called it “the most regressive tax known to womankind (man!),” predicting that “businesses will flee.” Proponents argue it’s exactly what the city needs. 

“Congestion pricing cannot happen soon enough,” said Danny Pearlstein, a spokesperson for the Riders Alliance, an organization of bus and subway riders fighting for better transit in New York City. 

Other cities will be watching closely to see if New York pulls it off.

The post New York City’s landmark congestion charge faces presidential headwinds appeared first on Corporate Knights.

Republicans call this the “parallel economy,” a platform where conservatives can support their own. Or as Seifert put it on a 2022 podcast: “Stop giving money to people that hate you.”

“Meet your new favorite brands,” boasts PublicSquare’s website: brands such as Carnivore Snax (a “meat potato chip”), StopBox USA (handgun storage); Nobiesse (natural cleaning products – read that name again); Prepper gold and silver bars; and Promised Grounds coffee (“done the right way. The Christian way”). PublicSquare also operates its own baby-product brand, EveryLife.

By mid-2023, PublicSquare claimed a million users, and big money was circling. Donald Trump Jr. invested and brought along Wall Street banker Omeed Malik of 1789 Capital. They helped the company go public at $23 a share. Despite their help, the stock price of “America’s marketplace” closed the first day at $21.

Stop giving money to people that hate you.

– Public Square founder Michael Seifert

Since then, the stock price has fallen by as much as 90%. PublicSquare’s results for the nine months ending September 30, 2024, showed a loss of US$44 million on revenue of just $16 million. At the same time, the company fired 35% of its staff as part of a restructuring that Seifert claims will reset the company as an e-payments powerhouse. So far, MAGA’s economic clout has underperformed. 

PublicSquare’s Trustpilot rating of 2.6 out of 5 (“Poor”) hints at other problems. Companies trying to advertise on the site say that it takes their money and delivers zilch. Worse, some patriots complained that their purchases actually originated from overseas. “I can only guess from where,” said one. 

But by early December, word had spread that Donald Trump Jr. was joining the board of the “woke-free” retailer, after which PublicSquare’s shares spiked briefly. Trump Jr. is reportedly focused on building a “cancel-proof” economy. There is no denying the anti-woke agenda is gaining ground.

The post Zero: ‘Woke-free’ retailer PublicSquare tries to install a parallel economy appeared first on Corporate Knights.

An hour later, the Washington, D.C.–based Natural Resources Defense Council (NRDC) chimed in: “We sued Donald Trump 163 times during his first term, and we’re ready to do it again.” 

“Despair is not an option,” said San Francisco–based Earthjustice. “Last time around, Earthjustice filed more than 200 cases in response to the Trump administration’s policies. We won 85% of the decisions – and we’ll do it again.”

Becoming an environmental advocate is very much motivated by idealism. You certainly don’t get rich doing climate work.

– Andrew Wetzler, senior vice president for nature, Natural Resources Defense Council

Earthjustice urged worried Americans to support Biden-era emissions regulations and challenge Republican efforts to reopen public lands to drilling. The non-profit also vowed to up its state-level litigation: it’s fighting to electrify school bus fleets in New York and Washington, decarbonize homes in California and Maryland, and halt plans for gas plants in nine states and Puerto Rico.

Lawyers make unlikely heroes. In a 2015 American Bar Association survey of the public, 69% said that “lawyers are more interested in making money than in serving clients.” In a 2023 Gallup poll, just 16% rated lawyers’ ethics as “high” or “very high.”

NRDC’s Andrew Wetzler, senior vice president for nature, shuns the “hero” mantle: “In a judicial setting, anyone can be heard – even in the face of a powerful government.” Still, he agrees that environmental lawyers are a breed apart. “Becoming an environmental advocate is very much motivated by idealism,” he says. “You certainly don’t get rich doing climate work.”

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Canada’s climate lawyers have also earned a shout-out. Vancouver-based Ecojustice is Canada’s largest environmental law charity, with 35 lawyers. Among its cases, it’s fighting for Indigenous Peoples’ right of consultation on major projects and  the rights of youth (Mathur et al) opposing Ontario’s rollback of carbon targets, a challenge that produced the first judicial ruling that climate inaction may violate Canadians’ Charter rights. 

Ecojustice executive director Tracy London says that Canada’s environmental lawyers share their U.S. colleagues’ “ferocity.” But rather than count wins and losses, she says that Ecojustice measures its success “in being thought leaders, ensuring that environmental law remains a thoughtful, vigorous way to hold governments accountable.” 

Rick Spence is a business writer, speaker and consultant in Toronto specializing in entrepreneurship, innovation and growth. He is also a senior editor at Corporate Knights.

The post Heroes: Environmental lawyers are stepping up to the challenge of Trump’s second term appeared first on Corporate Knights.

The bad news was not slow in coming: he invented a “national energy emergency” to crank up U.S. fossil fuel production, already the highest in the world; pulled the United States out of the Paris Agreement; blocked new offshore wind; froze some funding for the Inflation Reduction Act; and eliminated support – real or imagined – for electric vehicles.

But there’s a bigger picture to Trump’s presidency, and more progress on climate mitigation and adaptation than he can hope to obstruct. The next four years will hurt the United States’ competitiveness in the global energy transition, but here are six reasons why the green shift won’t be stopped.

1. Clean energy investments keep surging past fossil fuels

Despite worries that clean energy deployment was faltering, solar and EVs are surging around the globe, led by gangbusters growth in China. The International Energy Agency says that “the world now invests almost twice as much in clean energy as it does in fossil fuels,” hitting US$2 trillion. As two climate-risk profs from Australia put it, “This is a historic mega-trend and will continue with or without American leadership.”

2. Trump’s ‘drill, baby, drill’ approach is a double-edged sword

As The New York Times points out, the U.S. president may have promised to “make it easier to build energy infrastructure and secure drilling leases. But higher production could hurt prices and profits.” Trump’s push to lower the price of oil doesn’t just eat into oil company profits; it makes it less likely that oil companies will want to pony up to extract expensive bitumen in regions like Alberta’s oil sands.

3. Biden’s green-economy agenda will keep giving

Republicans may have tried to block the Inflation Reduction Act when they were in opposition, but with 85% of IRA financing in red districts, word on Capitol Hill is that Trump won’t have enough support to repeal Biden’s legacy bill. Either way, Biden already awarded more than US$100 billion to climate projects and the impact of those investments will come to fruition after he’s gone, as battery factories and charging stations, et cetera, come online.

4. Cities and states will once again lead on climate

It’s happened before, it will happen again. States and cities step into leadership roles on climate when hostile governments take over. California, the world’s fifth-largest economy, is already fixing to fight Trump on environmental rollbacks, and the red state of Texas just so happens to have more wind and solar power at the utility level than any other state. In fact, 50% of states, plus D.C., have renewable-energy requirements in place.  

5. More companies than ever have science-based targets

Yes, some high-profile corporations such as Amazon, Walmart and Microsoft recently scaled back some commitments made to the Science Based Targets initiative (SBTi), the framework set up to help companies reduce emissions by 42% by 2030, as they struggle to lower emissions. But by the end of 2023, four Georgia Tech profs note, “7,929 companies representing 39% of global market capitalization had committed to set targets, and 4,205 had targets already validated by SBTi.” The number with strong 2030 targets has since grown to 7,171.

6. More investors want real data on climate risks

Last year, the Securities and Exchange Commission responded to demand from investors by requiring public companies to disclose their exposure to climate risks. Whatever their perspective on decarbonization, investors want accurate forecasts of the financial impacts of climate change. The rule is being challenged and Trump could rescind it, but he’d be going against Wall Street’s wishes. 

The post Six reasons why Trump’s presidency isn’t the end of the world for climate change appeared first on Corporate Knights.

This interview has been condensed and edited. 

What is the Women Leading on Climate initiative? 

María Mendiluce: In January last year when the COP presidency came with an all-male team, my team called me and said, “María, we need to do something about that. We need to show these people, and the world in general, that there are really good people working on climate, and they’re women.” I’ve realized that when a woman is leading – at the COP process, presidencies, in the UN, in business, in sustainability functions – action happens. So I sent an email to my network and I got a response immediately. That led me to connect with [former Canadian environment and climate change minister] Catherine McKenna, and she said, “María, why don’t we join forces?” Because she started this initiative Women Leading on Climate in Glasgow. It’s great because she brings the policymakers and I bring the business leaders. So we started to do a set of dialogues, in New York, then we met [at COP29 in November] in Baku. We were oversubscribed. 

Women are ready. 

The energy in the room was amazing. And we also had fun. It gives us a place to share with others and feel part of the same team. Men and women are worried about climate change: 46% of men, 49% of women. But when called to act, it’s women who answer. Women are 2.5 times more likely than men to respond to climate messaging and to do something. 

What is it about women that makes them particularly effective in bridging this gap? 

When they see the challenge, they understand, they move to action. They take it very personally. In the same way that they probably do it in their families, or wherever they operate, they take responsibility for the problem and the solution. They are very talented, as talented as men. The difference is, there is a problem in my house, I have to solve it. 

How important is messaging in the climate fight? 

It’s really shocking, because across the political spectrum, in the United States but also other geographies, nine in 10 consumers believe most industries are going to be affected by climate change. Seven in 10 consumers in the countries tested agreed that businesses face significant risk. I think three in four consumers think that companies committed to using more clean energy will perform better financially than all sectors except AI in the next 10 years. It is clear that consumers know that climate is a risk and that investing in clean energy is an opportunity. I find that what this message shows is that consumers don’t want companies to mess with political fights. They need to talk about materiality – which is material to their companies. It is a moral issue, but in their position as companies this is very much material – there is a risk, there is an opportunity. But language matters. If you talk climate, then they say climate is “woke.” But if you talk extreme events, droughts, heat waves, people across political spectrums agree it is an issue. If you talk about climate solutions, then it is woke. But if you talk about clean solutions – clean is good. 

Are we failing at communicating this properly? 

There is one thing that is the messaging; the other thing is the business realities. We see that the business community across the board is moving to clean energy because it makes business sense. It’s cheap. It’s available. It improves their energy security. They can have it on their rooftop sometimes, it’s less volatile. The other thing is there is a disinformation campaign across technologies, like EVs burn more than internal combustion engines. I mean, come on. It’s the opposite. 

It doesn’t make sense, and yet somehow those messages are penetrating. 

Yeah, because the fossil fuel industry is putting a lot of money into these counter-narratives, and it’s driving consumers crazy, and even business because they say, “Yeah, I’m not going to change to EVs, I can’t charge my car.” Come on. You can charge it anywhere, because there are plugs all over the world. Or, renewable energy is expensive. No. Or it’s not reliable. No, it’s working very well. There is a street narrative for people who don’t know anything, but also there is a business narrative that is contaminated with a disinformation campaign. 

But businesses have a role to play in correcting that narrative? 

The thing is there is a lot of noise in the system that gives them doubts. If you’re in a business and you hear the government is changing and might change these rules, you say, “Well, I’m not going to invest until I know what is going to happen.” That’s why the worst thing that can happen in a country is policy incertitude, and incoherence. 

Are you trying to counteract some of that uncertainty with the We Mean Business coalition? 

First, what we’re trying to achieve is that the countries need to present NDCs [nationally determined contributions, which amount to climate plans as part of the Paris Agreement]. They need to reduce energy consumption, the efficiency goal. And then they need to say how clean energy – renewable energy – is going to replace fossil fuels. Here the key is that renewables need to replace fossil fuels. It’s not like you will do those things at different speeds. They need to be synchronized. 

How do you see the juncture we’re at in the climate fight? 

I think we are in a moment where the uptake of clean energy is unstoppable because it makes economic sense. Especially in developed countries. In developing countries there are other things at play that may delay, depending on the economic situation, depending on many things. I think companies and governments are realizing that actually achieving their net-zero targets is difficult. So they have to find innovative approaches to get there. And there are different ways. There is a lot to be done in electrifying the energy uses and using renewables. And that’s the game that is happening now. In China and Europe, because we don’t produce that much fossil fuel, the transition is going to accelerate very fast. In the countries that have fossil fuels, they have every incentive to use them. 

Like Canada. 

Like Canada. The resource is there. So I think it’s much more difficult to accelerate the transition. But there are two things: on one hand you have the demand of energy; on the other hand, the supply. I think every country has an interest in moving the demand to clean energy because it is cheaper, it is available, it improves the security of the country. Countries that have fossil fuel assets, they need to understand that the demand is going to decrease. So they either start the transition now with their economic system, or they have stranded assets. I’m not worried about Canada, or the U.S., because they have a diversified economy, but it’s more worrying for small countries that have their economies that are really dependent on fossil fuels. 

Do you think that message is being understood, that it doesn’t make business sense to invest in fossil fuels? 

No, because there is a shortened benefit for the next 10 years, and the fossil fuel industry is trying to milk the cow. Which is a huge irresponsibility. Because the impact of their actions can be counted in people’s lives.

The post Why women are leading the climate fight appeared first on Corporate Knights.

If there’s one thing the private sector craves most from government, it’s clear, stable policies. But in the coming year, many businesses will have no such luck as they navigate major changes to the global tax and regulatory environment that has been encouraging investment in more sustainable technologies and practices.

While the new U.S. president will be taking aim at legislation that resulted in nearly US$300 billion in private-sector investments in clean energy, battery manufacturing and clean power generation, most business leaders recognize that concerns about a worsening climate crisis will grow regardless of shifting political winds. The costly impacts of climate change and, more than anything, the declining costs of low-carbon technologies continue to drive investment in solutions.

Corporate Knights’ Global 100 ranking of the world’s most sustainable firms, now in its 21st year, shows that the top firms continue to increase their investment in the green transition. Even with higher interest rates in recent years, leading corporations have expanded their sustainable investments, which has resulted in a growing share of income being derived from sustainable revenue sources.

“We’re finding that growth in sustainable revenues is outpacing all other revenues,” says Toby Heaps, co-founder and CEO of Corporate Knights. “Over the last five years for major global public companies, sustainable revenues are growing twice as fast as other revenues, and they now represent over $5 trillion of annual revenues for the 3,000 biggest companies that we track.”

“With sustainable investment, it’s the same story,” Heaps says. “Sustainable capital expenditure is growing twice as fast as all other capex.” That green investment is key to a more sustainable future, telling us where companies are going as opposed to where they currently derive their revenues.

The firms in the 2025 Global 100 ranking allocated 58% of their investments to sustainable projects in 2023, up from 55% in the prior year. That figure compares with sustainable investments of just 15% for the 8,259 other publicly traded companies with revenues of more than $1 billion in the Global 100 universe.

2025 Global 100

Note: Banks, asset management and insurance peer groups are not assessed on the sustainable investment KPI. The weight of this KPI has been reweighted to the sustainable revenue KPI.

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Bumpy Road

For most of its 20-plus-year history, the Global 100 has outperformed its MSCI ACWI benchmark on total investment return. However, the MSCI ACWI nudged ahead of the Global 100 this year thanks mainly to the updraft in AI stocks, and, to a lesser extent, the rally of oil and weapons stocks, sectors that are not particularly strong on sustainability. This updraft effect, combined with high interest rates that depressed stock prices of firms spending big on transforming their assets (such as those leading the clean energy transition), led to the Global 100 underperforming over the past two years.

That said, the world’s top companies are staying the course, knowing that speed bumps won’t stop progress toward a more sustainable and inclusive economy.

French-based Schneider Electric SE climbed to the top of the 2025 Global 100, up from seventh place last year, thanks to a high level of sustainable investment and revenue, its leading performance on gender diversity, and the low carbon intensity of its production. Like the majority of companies on the Global 100, Schneider isn’t a consumer-facing household name; rather, it provides the nuts, bolts and technology for the green transition, including building energy controls, off-grid solar and EV charging and grid automation (read our top company profile). It also happened to rake in record-breaking revenues in 2024, built on continued demand for energy management.

Last year’s leader, Australian waste management company Sims Ltd., is in second place this year, while Danish wind manufacturer Vestas Wind Systems S/A is in third. Both Sims and Vestas are pure-play companies that derived 100% of their revenue from and allocated 100% of their investment to sustainable projects.

New to the Global 100 ranking for 2025 are Türkiye Sinai Kalkinma Bankasi, a national industrial bank based in Istanbul, and American manufacturer BorgWarner Inc., which produces battery systems, fast chargers and electric motors for mobility applications. Michigan-based BorgWarner’s high growth in sustainable revenue was particularly fuelled by the popularity of EV components, such as its electric powertrains.

Danish jewellery manufacturer Pandora also joined the ranking for the first time as its recycled gold and silver inputs jumped to 97% in 2023, from 61% the previous year.

Canada has 11 companies represented in the Global 100, second only to the United States, which has 15. The Canadian contingent is led by engineering firms Stantec Inc., which aimed 82% of its capital expenditure at sustainable investing in 2023, and WSP Global Inc., which earned 64% of its revenue from sustainable sources that year.

Canadian insurers Sun Life Financial Inc. and Manulife Financial Corp. both earned spots in the Global 100 ranking, as did telecommunications giants BCE Inc., Telus Corp. and Cogeco Communications Inc. (The Corporate Knights ranking allocates spots by sectors to reflect the global economy. For example, 16% go to financial institutions and 7% are reserved for telecoms.)

Green snakes and ladders

Staying on the ranking can be a challenge. The Bank of Montreal had been dropped from the 2024 ranking but regained its place in this year’s version. The bank improved on a number of metrics, notes Matthew Malinsky, director of sustainable economy intelligence for Corporate Knights. BMO saw gains in sustainable revenue, its CEO-to-average-worker pay ratio, racial diversity and its sustainability pay link in which 10.3% of the CEO’s pay is tied to achieving the company’s social and environmental goals. The bank has a rapidly growing green loan book and has provided just under $40 billion in renewable-energy financing since 2019.

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Anglo American is also new to the ranking, bumping off Canada’s Teck Resources (which had been on the list for six straight years) as a result of Anglo’s sustainable investment growth of 19% and increases in sustainable revenues from mines tied to low-carbon-economy minerals such as copper and nickel.

Brookfield Renewable Partners also dropped from the ranking, despite its strength in sustainable investing and revenues. Brookfield was red-flagged by the non-profit shareholder advocacy group As You Sow over its investments in Westinghouse Electric Company, which manufactures rods that produce tritium used for nuclear weapons.

2025 Global 100 vs. the rest

Indicator	2025 G100	2024 G100	2025 average*	2024 average
Sustainable revenue (% total revenue)	53%	51%	15%	16%
Sustainable investment (% total investment)	58%	55%	15%	17%
Executive gender diversity	25%	24%	18%	19%
Board gender diversity	36%	35%	25%	25%
Executive racial diversity	10%	11%	10%	8%
Board racial diversity	12%	14%	12%	10%
Cash taxes paid (% of profits)	14%	14%	9%	14%
Carbon productivity ($ sales/tonnes GHGs)1	$1,305,869	$927,244	$640,248	$491,909
Energy productivity ($ sales/GJ energy used)2	$95,316	$479,161	$93,071	$160,630
Sustainability pay link	80/100	64/81	2830/8062	1882 / 6330
CEO–average worker pay ratio	79:1	85:1	60:1	74:1

* Large publicly traded companies (with more than PPP$1 billion in annual revenue), excluding the Global 100.

1 – For comparison purposes, the scope 2 portion of the Carbon Productivity numbers in this chart are calculated according to a market-based methodology. Please note that in prior year publications, scope 2 emissions were calculated using a location-based methodology

2 – Companies that have no net non-renewable energy use do not receive an energy productivity value but receive a 100% energy productivity score.

Room for improvement

There are areas where all Global 100 firms can improve. The top firms may be leaders in pursuing gender diversity on their boards, but only a handful (Autodesk, SMA Solar and Taiwan Cooperative Financial Holding Co Ltd) have reached gender parity at the executive level. And Global 100 companies perform no better in terms of racial diversity than the broader universe of large publicly traded companies.

The road to decarbonization and a more inclusive economy will become bumpier in the coming years given the current political backlash. However, corporate sustainability leaders appear to be committed to progressing down that path, as evidenced by more than two decades of the Global 100 rankings. 

Shawn McCarthy is an Ottawa-based writer.

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Methodology

The Global 100 methodology uses a mix of fixed and variable-weight ESG and sustainable-economy key performance indicators (KPIs) to score companies against their peers. We measure the share of revenues and investments that are included in the Corporate Knights Sustainable Economy Taxonomy and percent rank those ratios against the company’s peer group (CKPG). We then give equal weight to the ratios and the percent ranks in awarding up to 25 points for sustainable revenue and up to 25 points for sustainable investment, for a total of 50 possible points.

The other 50 points in the Global 100 are allocated to 22 ESG KPIs, covering environmental, social, governance and supplier sustainability themes.

In addition, penalties can be levied against overall scores for low performance on the following indicators: productivities for water, waste, VOC, NOx, SOx and PM; cash taxes paid; injury rate; and fatalities. Up to five points are deducted for companies that have been levied fines above a percentage threshold of their revenue compared to other companies. Lastly, the political influence KPI may earn a company 2.5 bonus points.

After analyzing data for 25 KPIs, using the Corporate Knights methodology, this year’s overall scores were converted to letter grades.

Awarded to the top company​

Above 75%

70% – 75%

65% – 70%

60% – 65%

55% – 60%

50% – 55%

45% – 50%

40% – 45%

35% – 40%

30% – 35%

25% – 30%

To learn more about Corporate Knights research, head to corporateknights.com/research-products.

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2024 GLOBAL 100

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The post 2025 Global 100 list: World’s most sustainable companies are still betting on a greener world appeared first on Corporate Knights.

While Blum may have just arrived in the CEO role, he’s a well-known commodity within Schneider, having spent more than 30 years at the company. His fingerprints are all over the changes that have led to Schneider being the first company to top the Global 100 more than once (it first earned top spot in 2021).

Blum led Schneider’s first steps in emission reductions and corporate social responsibility (CSR) 20 years ago. At first, sustainability targets were seen as extra initiatives to be achieved while the organization carried on operating in much the same way. “Very quickly we realized this concept of corporate social responsibility living in a separate part of the [company’s] universe didn’t make a lot of sense,” Blum says. 

With revenues of €36 billion in 2023 and offices in more than 100 countries, Schneider Electric’s universe is vast. It manufactures and sells everything from light switches to electrical panels. It’s also a world leader in helping data centres reduce power consumption, as well as offering AI-based solutions for smart energy and building management, software, micro grids, EV charging, water management and energy management – the division that Blum led prior to his appointment as CEO.

A structure that supports diversity

Much of the company’s marketing material extols the benefits of the smart city of the future – where most everything is electrified, renewable generation and consumption are closely managed, and efficiency drives down energy demand. 

But it is on employee diversity where Blum’s enthusiasm really comes through. Rather than having diversity targets separate from the company’s activities, Schneider learned from its CSR experience and changed its entire structure to promote diversity.

Schneider was a traditional French company with a French headquarters and a leadership that was, consequently, largely French. To break out of this mould, the company invented what it calls a “multi-hub model,” says Blum, who led Schneider’s diversity efforts for five years as head of human resources. The company now has three regional hubs, in the United States, Europe and one serving the Middle East and Asia (Blum is based in Schneider’s Dubai office and was previously in France, India, China and Hong Kong).

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The benefits are very clear to Blum. “If you are working in China, you don’t need to go back for a decision to Paris or to the U.S. to move fast and to have an approval. The second benefit is that when you’re 25 years old, you enter Schneider, for instance, in the U.S., in China, in India, now in the Middle East. You look at that and you say, ‘Oh, I can go to the top of the company even staying in my region.’”

‘Whether we like it or we don’t like it’

But a global company also attracts global criticism. Corporate Knights received dozens of  complaint letters in 2023 after announcing that Schneider Electric was once again ranked one of the 100 most sustainable companies. The complaints centred on the use of Schneider’s technology in a pipeline linking Uganda with the Tanzanian coast.

“I always understand that some people can have a different point of view, but we are very at ease with our position on those kinds of projects,” Blum says. “It will take time to move from fossil fuels to renewables; it’s a fact whether we like it or we don’t like it. So we prefer Schneider to be involved in those projects and to help our customers to build pipeline infrastructure” that consumes less energy and therefore emits fewer emissions. 

Roughly 5% of Schneider’s revenues do not meet the EU’s rules on “environmentally sustainable” economic activities or are products with sulfur hexafluoride (used in insulating electrical parts); 74% is considered sustainable.

Despite more pipelines being built, Blum is confident that global momentum for decarbonization is growing at all business levels.

Enduring demand for decarbonization technology

The 2015 Paris Agreement created a big incentive for Schneider to double down on its sustainability focus, but that decision was not echoed in its customer base. Blum reckons that it took three or four years for the enormity of the Paris Agreement to transform into business decisions at many large corporations: “2019 is when we started to see a large number of enterprises taking a lot of interest [in decarbonization]. I was leading strategy and sustainability at that point of time.” 

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Then COVID hit, and rather than impede corporate decarbonization efforts, things started to accelerate – a trend that continues as more climate-reporting obligations in Europe and around the world have spurred even more interest in the last two years. “Many large companies in the world have realized that they have to be part of that story,” Blum says. This has a knock-on effect well beyond the direct emissions of large corporations. “Many of [their suppliers] are small and medium-sized enterprises. And SMEs are seeing that if they want to stay relevant, then for their large customers they also need to have a decarbonization strategy,” he says.

The end result is growing demand for the decarbonization technology that Schneider Electric offers. The company has been tracking all the companies that publicly commit to net-zero with science-based targets, and the list, Blum says, is doubling in size every year.

“Now is a very interesting place because we meet all the largest companies in the world, and all of them put sustainability in their strategy,” he says.

Adrian Hiel is a Canadian writer who has spent the last two decades in Brussels.

The post This French energy-solutions powerhouse is the world’s most sustainable company of 2025 appeared first on Corporate Knights.

Early analysis suggests that global warming increased the likelihood and intensity of the extreme downpour, caused in this case by clashing warm and cold air over the Mediterranean Sea. In Paiporta, a town where at least 60 people died, residents digging themselves out of the devastation hurled mud from the storm at the king and queen of Spain who came to pay a visit, screaming out “killers” as a balm to their impotence and grief. 

If a picture is still worth a thousand words in our hyper-visual societies, then these fragments of environmental destruction, and those demanding accountability, represent powerful ammunition in the climate-messaging wars swirling around us. 

While outright climate denialism is waning as the direct evidence of global warming mounts around the world, new and more pernicious forms of denial are gaining ground. The election of powerful climate skeptics in 2024 – including Donald Trump, whose new energy secretary is a former fracking CEO who has talked up the benefits of a warmer planet and who just pulled the United States out of the Paris climate accord – shows just how fragile the gains made are. 

Last year was exceptional for global democracy. More voters than ever in history headed to the polls in at least 64 countries, representing nearly half the world’s population. That’s why the “super election year” was also considered crucial for climate change – a chance for electorates to install leaders who could shepherd the delicate decisions required to drive down our planet-heating emissions. And yet, climate concerns far from defined those votes, suggesting that the magnitude of the problem still eludes us. 

With 2024 going down as yet another hottest year on record, some scientists call the international target of limiting global warming to 1.5°C above pre-industrial levels “dead as a doornail,” while the United Nations considers it to be “still technically possible.” Setting aside that abstract figures such as these mean little to the average person, the prescription depends on a massive mobilization to cut greenhouse gases, led by the industrialized G20 nations that have most contributed to warming. 

Yet even at the world’s largest annual climate talks, the messaging has grown increasingly murky, muddied by fossil fuel interests and, as UN climate chief Simon Stiell put it, a mix of “bluffing, brinkmanship and pre-meditated playbooks.”

So where do we go from here? What’s the story we should be telling about climate change to produce concrete action that staves off its worst effects? With increasingly polarized public discourse, rampant disinformation and a democracy deficit driving a wedge between leaders and the communities they lead, can messaging make a difference?

1.5 degrees of separation 

“What we know is we can get people to care.” That’s Sergio Velasquez-Rose, head of strategy, insights and analytics at the Potential Energy Coalition, a non-profit, non-partisan alliance of marketing agencies trying to shift the conversation on climate change. 

Polling suggests that much of the global public does, in fact, understand what is at stake. 

The largest stand-alone public opinion survey, known as the People’s Climate Vote, took the temperature of 77 countries – representing 87% of the world’s population – in 2024. It found that 86% of respondents want countries to work together to find climate solutions, even if they disagree on other issues such as trade and security. Eighty percent want their communities to strengthen their climate commitments, and 71% want their countries to replace coal, oil and gas with renewable energy quickly or somewhat quickly. A survey by Potential Energy of 23 countries came to a similar conclusion: more than three-quarters of respondents want governments to do “whatever it takes” to limit the effects of climate change. 

This suggests that crafting a climate message that resonates shouldn’t be that hard. But it has been. 

“We really see this as a major communication problem,” Velasquez-Rose says. “We have the policies, we have the solutions, we know what the problem is and how to address it – but we have not been able to connect with humans in the right way.” He adds, “We’re getting stuck in concepts.” 

In its climate marketing guide called “Talk Like a Human,” Potential Energy lays out tips and traps – the latter of which this article has already fallen victim to. Words including “decarbonization,” “net-zero,” “anthropogenic” or “carbon footprint” don’t work. Instead, lean into pollution, overheating and extreme weather. Don’t exaggerate, it says – terms like “climate emergency” or “climate crisis” work much better with people who are already alarmed but not with people who aren’t, Potential Energy has found. Even something like “fight climate change” has pitfalls, its research has discovered. Instead, “fight pollution” is far more effective, accurate and a framing that people are already familiar with. 

We talk to people’s heads, but we forget to talk to people’s hearts.

—Mark Hertsgaard, co-founder, Covering Climate Now

Too often, climate change coverage is locked in scientific abstractions, such as 1.5 degrees or parts per million, notes Mark Hertsgaard, who co-founded Covering Climate Now, a partnership of now more than 500 media outlets (including Corporate Knights) that share content and expertise over how to cover climate change. Most people don’t know about the Paris Agreement, let alone the significance of 1.5°C.

“We talk to people’s heads, but we forget to talk to people’s hearts,” says Hertsgaard, who has reported on climate for 30 years, from 25 countries. When he launched Covering Climate Now five years ago, the goal was to break the “climate silence.” Through a collective effort that stretches beyond his organization, he believes that has largely been achieved. But coverage is still driven by the “weather story” and occasionally by climate change conferences, with little intersection with political and economic desks. “That reflects a misunderstanding, to put it mildly, of what climate change is and what it means: that this is an existential threat comparable to nuclear war and nuclear weapons, just on a different time frame,” he says. 

India, for example, went to the polls in the midst of a ferocious heat wave in June that claimed the lives of dozens of election workers and set off protests about water shortages – but climate was hardly at the forefront for presidential contenders. A feedback loop was missed. “Had candidates talked more about it, then media would have talked more about it, and had the media talked more about it, candidates would have talked more about it,” Hertsgaard says. 

Therein lies another issue: the messengers. The fact that politicians are currently the main communicators of climate action is a problem, Velasquez-Rose says, given their lack of credibility in large swaths of the planet. In the United States, which Potential Energy research shows has the greatest polarization on climate issues in the world, climate action is mostly associated with just one party, alienating those who support the other. 

Before the pandemic, Greta Thunberg, the Swedish youth environmentalist, had hit a nerve, mobilizing millions of young people from Argentina to Iceland to skip school and join marches to demand greater action from their governments with her Fridays for Future movement. But by 2024, some of the most visible climate messengers were critical of climate policies: European farmers driving their tractors into cities, pelting police with beets and dumping potatoes in front of legislative buildings in a standoff that led legislators to roll back environmental policies on the fastest-warming continent on the planet. 

“We need new voices to be the face of climate,” Velasquez-Rose says. He points to the success of a campaign they have run called “Science Moms,” which features scientists who are also mothers speaking about the impacts of climate change. In the five years since the campaign launched, it has increased support for climate policies by 20% among the target audience of moderate suburban mothers, Velasquez-Rose says. The Science Moms have credibility, and they are relatable, which is part of the secret sauce. 

Climate messaging bubbles and the new denialism

It’s not just what is being said, and who is saying it, but how that messaging is being funnelled and funded. For decades, the right-wing media machine in the United States has been building a powerful amplification system that stretches across evangelical churches, radio talk shows, podcasts, influencers and YouTube streamers, with massive amounts of funding from oil and gas interests and beyond pouring into anti-climate messaging that spreads disinformation like wildfire. “Nothing like that exists on the left,” Hertsgaard says. “Instead, there is a mainstream media that is still trying to play by the old rules that we’re going to be so-called objective and we’re not going to take sides. We sure as hell should be partisan as hell on behalf of the truth.” 

New fronts have also opened in the messaging wars that are reflected in a reframing of who bears responsibility. Richard Brooks, the Toronto-based climate finance director of Stand.earth, an environmental organization, notes the slippery shift from big banks. “There is this term that we keep hearing over and over again, which is that the energy transition that needs to happen has got to be ‘orderly’ – I’m going to put that in quotes,” he says. “And that is code for ‘We will stay invested in oil and gas companies.’ It will continue to be business as usual.” 

Since the Paris Agreement, Canadian bank investments in fossil fuels haven’t significantly changed, Brooks notes, with the “Big Five” banks funnelling nearly $1 trillion into the industry between 2016 and 2023, according to Stand.earth. “Slow-walking on climate action is really the new climate denialism,” he says. 

Brooks is part of a wave of longtime environmental activists who have shifted away from climate-messaging campaigns that try to get the public on side and instead have set their sights on the finance sector, fuelled by the belief that money is the message. Some, like the founders of Investors for Paris Compliance, are now working as shareholder activists, directing their messaging to hold Canadian publicly traded companies accountable to their net-zero promises. A number of environmental groups have established climate finance arms, including Stand.earth, which calls out inconsistent messaging from banks that claim to be net-zero aligned while still financing fossil fuels. 

“We need to challenge any corporate leader [or] CEO of a bank or pension fund who says we need to go orderly on this and slow,” Brooks says. “There’s nothing orderly about wildfires forcing thousands to evacuate [or] Toronto, the financial centre of Canada, flooding twice this summer.” 

From ‘greenwashing’ to ‘greenhushing’

Fear of getting caught in the crosshairs of the climate-messaging wars has contributed to a growing number of companies going quiet. A Republican-led backlash against corporate climate policies, under the banner of ESG (environmental, social, governance), has given rise to “greenhushing” – rather than aggrandizing environmental initiatives through “greenwashing,” companies are shying away from publicizing their green efforts. 

“In a polarized political environment, communicating about climate can feel risky for a publicly-traded company,” writes the Potential Energy Coalition, which teamed up with the We Mean Business Coalition to develop a new messaging guide for businesses. Across the globe, research shows that consumers want companies to reduce planet-warming pollution and invest in clean energy. In fact, they are more likely to spend their money on, speak well of and want to work for corporations that do so. The key, Potential Energy has found, is to frame climate action around materiality – not morality. 

“One thing is the messaging, the other thing is the business reality,” says María Mendiluce, CEO of We Mean Business and co-founder of the Women Leading on Climate coalition. “We see that the business community across the board is moving to clean energy because it makes business sense.” Still, language matters, she says. “In general, it’s quite simple: simple messages that people understand, that they can relate to.” 

“I think the left has been very good at complicating things to a level that many don’t understand and disconnecting with the base, with people who may not have that level of understanding of something that is really complex,” Mendiluce says. “We talk about ESG. And people are like, what is this? Even for me, and I come from the energy world.” 

One person who is adept at distilling a message so it resonates with a wide audience is once again president of the United States. The Democrats may have shied away from making climate change a focal point of their campaign, but Donald Trump used it. In the battleground state of Michigan, the Trump campaign ran ads that demonized the electric vehicle industry and cut to the heart of U.S. sensibilities about personal freedom and government overreach. “Kamala Harris wants to end all gas-powered cars. Crazy but true,” one commercial said. “Michigan auto workers are paying the price. Massive layoffs already started. You could be next.”

The climate change message has become so toxic to right-wing voters that some advocates for climate action believe the key is finding approaches that sidestep the topic and engage on different terms. For Joe Sacks, a Democratic political strategist, that means finding “friendlier terrain.” He is executive director of the EV Politics Project, a venture launched by EV-owning Republicans “frustrated by the growing EV bashing” and looking to foster more productive discussions around electric vehicles. His group found that US$35.5 million was spent nationwide on EV advertising during the presidential campaign. Some 94% of that money was spent in Michigan, the automotive heart of America, and the vast majority of the messaging was anti-EV.

Sacks thinks that Democrats should stop messaging along climate lines when it comes to EVs. “That’s just not how this is going to work. We need to find messaging that brings people in, that meets them where they are,” he says. Right now, he says, that message needs to revolve around manufacturing jobs. “Jobs that you often don’t need to get a college degree for, jobs that are often unionized, and when they’re not unionized they still pay really well, jobs that are spread across this country.” 

Democracy deficit

Tyrell Gittens, a climate change reporter in Trinidad and Tobago, agrees that the key is speaking to people in terms that hit closer to home. Issues like inflation or the success of their crops remain top of mind for many on his island nation, but the volatile climate’s role in that is still not clearly understood by many. “People want to understand; we have to meet them where they are,” he says. “An informed citizenry will create political will.” 

Inés Camilloni, a climate scientist in Argentina, notes a whole host of economic and geopolitical factors well beyond the scope of communication that make progress on tangible climate action complex, and, certainly, too slow. But “we have progressed.” And she credits messaging with helping usher in cultural transformations, including in places like her home country, where young people inspired by Thunberg helped push the government to enact new environmental legislation. That was, however, before the election of the current president, Javier Milei, a strong ally of Trump who echoes his denial that climate change is human-caused. In November, Milei pulled his delegation from the COP29 discussions and then revealed he was reconsidering Argentina’s place in the Paris Agreement, a move that raised the spectre of other countries following suit. “We are in uncertain times,” Camilloni admits. 

The biggest motivator 

For Hertsgaard, there are important levers still to be pulled in the messaging battle. “We have to be talking about solutions – not just what’s wrong,” he says. And drawing more attention to the gap that exists between what people say they want from their governments on climate action and what governments are doing.

The research is already painting a pretty clear picture of what works, Velasquez-Rose notes. Protecting one’s health and protecting our homes and families against extreme weather performs far better as a motivator for action against climate pollution. But fear versus hope is the wrong debate. The biggest motivator is protecting what we love. 

“The thing that ultimately gets us, that really core human truth, is protecting the future for the next generation,” Velasquez-Rose says. “When we think about communicating, we need to think about the humans. I can’t reiterate that enough.”

Natalie Alcoba is a Buenos Aires-based journalist and senior editor at Corporate Knights.

The post The climate conversation needs a reset. Here’s how to do it. appeared first on Corporate Knights.

By early summer, conservative activists were targeting companies like Tractor Supply and John Deere for supporting Pride festivities and climate policies, pressuring them to roll back DEI initiatives. A domino effect followed: Harley-Davidson, Lowe’s, Ford, Toyota and Molson Coors pulled back as well. By November, Boeing had dissolved its global DEI department entirely.

This retreat comes as Donald Trump begins his second term as president of the United States, and he’s made his intentions on the topic clear: to purge DEI programs from federal agencies, calling them “anti-white racism.” With the 2023 Supreme Court’s decision to strike down affirmative action in U.S. colleges already fuelling anxieties, companies are bracing for what’s to come.

The rise and fall of DEI programs

As quickly as corporate DEI policies rose to prominence, the scaffolding of modern, resilient leadership has started fraying at the seams. What was once a surge of commitment to equity is now under relentless attack, and the stakes couldn’t be higher.

It’s a sharp pivot from 2020, a year when DEI surged into the corporate spotlight. Following the murder of George Floyd at the hands of Minneapolis police, the Black Lives Matter movement reignited a global reckoning on racial injustice. Alongside the rise of the #MeToo movement, companies across industries made bold commitments to equity. DEI roles were created at record levels, boards diversified, and women and racialized leaders began stepping into long-overdue positions of power.

For many DEI professionals, the promise of change faded fast. As one former DEI executive in a communications agency tells Corporate Knights, asking not to be named,“We were hired to lead change, but it quickly became clear that leadership wanted optics, not transformation. You can’t drive systemic change when you’re treated like a checkbox.”

This performative approach – treating DEI as a PR move rather than a foundational pillar in corporate strategy – permeated corporate culture, leaving companies exposed. When the backlash hit, those commitments crumbled under pressure, revealing just how fragile their so-called progress really was.

The anti-equity movement has been emboldened by figures like Robby Starbuck, labelled by The New York Times as the “anti-DEI agitator that big companies fear the most.” His mission is explicit: “I won’t rest until we eliminate leftism from corporate America.” Starbuck, a former music-video director turned conservative activist, and others portray DEI not as a corrective framework but as a divisive ideology, rallying around a call for “neutrality.”

We will continue to focus on increasing representation.

– Dawn Jones, chief diversity and inclusion officer, Intel

But let’s be clear: neutrality is a privilege. It upholds the existing system of exclusion and inequality, allowing companies to disengage from meaningful change under the guise of impartiality.

The narrative shift has been amplified by the Supreme Court’s ruling on affirmative action. The court’s decision, which interprets the Equal Protection Clause of the Constitution, applies specifically to public and private colleges that receive federal funds. It doesn’t apply to private and public corporations.

Race-based employment decisions, like reserving hiring slots for racialized candidates, were already illegal under Title VII. of the Civil Rights Act of 1964, a federal law that prohibits discrimination in employment based on race, colour, religion, sex or national origin. In states like California, where Proposition 209 has banned race-based affirmative action in state university admission, state hiring and state congracting for nearly three decades, companies have continued their DEI programs without legal challenges.

What’s changed isn’t the legality of DEI – it’s the story being told about it. By retreating from DEI, companies aren’t avoiding legal headaches; they’re choosing a side. They’re aligning with a status quo built on exclusion, sending a message that inclusion is expendable when it’s inconvenient.

But the economy itself isn’t leaning toward exclusion; it’s hurtling away from it. Gen Z – poised to become the largest working demographic – prioritizes DEI so strongly that one in two won’t work at a company without diverse leadership, and 68% believe employers aren’t doing enough to foster diversity, according to ManpowerGroup, a multinational recruitment agency.

DEI isn’t about optics – it’s about survival

CEOs who treat DEI as window dressing – a splash of colour for their press releases and LinkedIn feeds – are fundamentally missing the point. In today’s polarized market, DEI isn’t a political statement; it’s a business survival strategy.

The data is clear: companies that invest in DEI outperform their peers in innovation, customer loyalty and market relevance. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean. But DEI works only when it’s embedded into the foundation of an organization. When it’s treated as an afterthought, it collapses under the weight of scrutiny.

True resilience demands more than lip service. It’s more than one-off initiatives or employee resource groups tucked into a dusty corner of the HR department. Resilience comes from a culture of inclusion that runs so deep it holds firm through economic downturns, political headwinds and shareholder pressures. Companies that understand this know that a successful DEI strategy isn’t cosmetic; it’s rooted in long-term commitment and integrated into every aspect of the business.

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In a landscape where many are retreating from DEI, some companies have stood as beacons of resilience. Intel first launched a US$300-million Diversity in Technology initiative in 2015 aimed at doubling the number of women and underrepresented communities in technical roles. Despite cutting 15% of its workforce in August, Intel retained its vaunted commitment to DEI and continued to prioritize an inclusive culture.

“We will continue to focus on increasing representation,” the company’s chief diversity and inclusion officer, Dawn Jones, said in September. (Whether that commitment holds now that Intel forced out its CEO in December remains to be seen.)

Outside of the United States, where DEI is less contentious, South Africa’s Investec Bank as well as Vitasoy, Unilever and StarHub have been recognized by Corporate Knights’ 2025 Global 100 ranking for their racially diverse leadership, demonstrating that embedding DEI into corporate strategies drives innovation and sustainable growth.

This isn’t about “virtue signalling” or appeasing critics. Real DEI work – transformative DEI work – upends traditional corporate structures and power balances. It’s uncomfortable by design, made to challenge ingrained biases, to question privilege and to open doors where they’ve historically been closed. Leaders committed to this work know that resistance is part of the journey.

Here’s how corporate leaders can establish a DEI framework that lasts:

1. Make DEI part of the business, not just the brand

DEI shouldn’t just be a side hustle for HR and marketing departments. It has to be integral to how your company operates. Heineken’s Women in Sales program offers a compelling example. Sales isn’t a peripheral department – it drives revenue and growth. Despite 24% of women in the overall company, only 9% of the senior sales roles were occupied by women in 2020. By increasing women senior managers in sales from 9% in 2020 to 19% in 2022, Heineken began aligning its leadership with the shifting demographics of its consumers, as women begin to outnumber men as alcohol consumers.

2. Build enduring DEI infrastructure

DEI efforts fall apart when they lack accountability and follow-through. Real progress requires systems to track and measure impact. Set goals for diversity in hiring and promotions and regularly assess whether you’re meeting them. Ongoing training – tailored to challenge biases and promote equity – is key. A company’s commitment to DEI can’t stop at entry-level hires; it has to be a ladder, not a revolving door.

3. Dig deep to make real gains

In a world where visibility can make you a target, DEI doesn’t need to be loud to be effective. Dig into internal issues that drive inequity: pay gaps, lack of diversity in leadership, inequitable promotion practices or a toxic workplace culture. Real benefits are the initiatives that directly improve employees’ lives: fair wages, comprehensive healthcare, flexible working options and robust support for mental health and well-being. These aren’t social media wins; they’re the hard-won gains that position you for lasting relevance.

As we 2025 begins, the call for DEI isn’t fading into the background. The question isn’t whether DEI is worth the risk; it’s whether your company can afford to ignore it. Real leadership won’t be measured by who avoids backlash or sidesteps discomfort. It will be measured by who builds for the future while others retreat to the past.

Shilpa Tiwari is an ESG consultant and the founder of No Women No Spice. She lives in Tanzania and Toronto. 

The post Just because Trump wants to kill DEI doesn’t mean CEOs should appeared first on Corporate Knights.

For nearly 500 years, whenever things have gone very badly – a storm sank your ship, say, or a drought killed your crops – and the normal course of business has been unforeseeably and uncontrollably disrupted, you could always blame your problems on an “act of God.” Dig into nearly any boilerplate contract for goods or services today and you’ll still find an all-purpose divine scapegoat, there to take the heat for catastrophes that no one could have reasonably anticipated or prevented. 

It’s a good system: when shit happens, blame God. Now that we’ve pumped a few trillion tonnes of greenhouse gases into the atmosphere, however, God has grown less reliable as a fall guy. Courts rely on historical weather data to determine foreseeability when assessing act-of-God claims, but in the era of climate change, much of that data is no longer accurate. “You can’t keep calling things hundred-year floods when you have them three years in a row,” points out Richard Reizen, a partner at Gould & Ratner and chair of the firm’s construction practice. 

In recent years, many lawyers like Reizen have called attention to the intrinsic tension in force majeure provisions – “force majeure” is a broader category of calamities that encompasses acts of God and includes things like war and strife – as the direct impacts of climate change add new layers of uncertainty across many sectors, while also opening doors to new opportunities for investment. 

Construction isn’t the only industry where natural disasters and weather disruptions have increased the frequency of force majeure claims. “The climate is changing, and the law has to change with it,” says Hannetjie Marais, a legal advisor at Inlexso in South Africa who represents clients in the energy sector, where climate change affects renewables in particular.

Reizen and Marais are part of a cohort of legal professionals helping businesses transition to the new epoch of climate risk, alongside digital innovators in insurance and weather forecasting. Altogether, they are laying the groundwork to unleash the necessary capital for a new economy where climate adaptation and mitigation take centre stage. 

The new force majeure

One way of tracking the increase in force majeure claims is by looking at the number of weather events with more than a billion dollars in damages, as the two tend to correlate closely, says William Droze, a partner at Troutman Pepper, a U.S.-based law firm. Data from the National Centers for Environmental Information shows that billion-plus events occurred on average 5.6 times per year in the 1990s, compared to 20.4 times per year over the last half-decade. In 2023, there were 28. 

But the changes to the weather wrought by global warming aren’t all showstoppers like hurricanes and tropical storms. Climate change also alters global weather patterns in ways that aren’t as damaging as headline-making extreme events. Sometimes the wind blows less, not more. 

A 2022 study of the resilience of renewable energy under a changing climate found that, under high-emission scenarios, “wind energy and hydropower production could decrease by as much as 40% in some regions due to climate change.” While other forecasts are less stark – the Intergovernmental Panel on Climate Change has projected that average annual wind speeds could drop by 10% globally by 2100 – there’s no doubt that climate change alters wind patterns in ways that are unevenly distributed. For example, wind energy potential in India fell by 13% from 1980 to 2016 because of rising temperatures in the Indian Ocean. 

The climate is changing and the law has to change with it.

— Hannetjie Marais, legal advisor to Inlexso

Marais says that shifts in weather patterns have also led to disappointing results for wind energy in South Africa. “What we’ve seen happening on the ground is that wind farms are not performing as expected,” she says. That sets the stage for legal disputes and potential appeals to force majeure over missed production targets. “You use 20-year historical wind data to decide what the power curve for a facility is going to be, and suddenly the wind simply stops blowing.” 

Short-term wind droughts also pose an occasional threat. For example, in 2021, plummeting wind contribution forced the United Kingdom to temporarily reignite two mothballed coal plants. But the very next year, Britain’s wind farms produced record power, and its coal plants were ultimately shuttered for good in 2024. 

Long term, hydropower production will fall steeply in some regions where climate change disrupts precipitation patterns, snowmelt dynamics and river flows, says Ahmed Osman, a senior research fellow at Queen’s University Belfast and the lead author of the 2022 study. China and South America will experience declines, and Portugal could see a 41% reduction in hydropower generation by 2050 due to reduced rainfall and reservoir capacity. 

Diversified renewable-power sources across large geographic areas are capable of compensating for temporary wind or rain droughts or missed targets, but investors and operators of renewable projects need to be realistic about the risks. Marais says that for renewables to continue developing, they’re going to need force majeure protections that reflect the reality of a changing climate. “Because of climate change, businesses can no longer rely on historical weather information such as wind data to help develop an accurate financial model,” she explains.

Increasing granularity, greater flexibility

One way that lawyers writing contracts for renewable production and other industries can improve their defences against weather risk is to dig down into the details. “Engineers plan for sea walls and barriers to protect cities from future floods,” write Kristina Kopf Thomas and Briana James of the law firm Eversheds Sutherland. The same must be done for contracts, they argue. “We must look at how contractual provisions intended to address the extraordinary will function in a world where what was once unusual is now less so.” 

The key, Thomas and James say, is to get specific. “Parties relying on boilerplate force majeure clauses may unintentionally find themselves responsible for unwanted risks,” they write. For example, if a builder is contracted to construct a development in a region where hurricanes are occurring more frequently, Thomas and James suggest describing the wind speeds and duration that would excuse delays or nonperformance, rather than hurricanes in general. 

When he’s negotiating a construction deal, Reizen has learned to include “weather days” in the contract. “What I find most effective is to sit down, look at where you’re building, and put down a specific number of weather days that you actually put in the contract so that people can adequately plan,” he says. 

It’s not always the direct impacts of extreme events that cause the greatest problems; sometimes the secondary effects create the most setbacks. “In California, when there’s a forest fire, you’re not just looking at the fact that it could come on your property,” Reizen says. “The bigger risk is air-quality days where, because of fires, people can’t work outside.”

Still, you have to strike a balance, says Mary Mbugua, founder and CEO of Risk Response Africa, a risk-management company in Kenya. Force majeure provisions should be “specific enough to address the risks at hand while also allowing for flexibility due to the uncertainties inherent in climate science.” Mbugua suggests that contracts should allow for adjustments as new scientific data or risk-modelling techniques emerge, as well as include provisions for periodic reviews and updates. 

Hedging climate risk for the renewables market

Carefully written contracts can’t do all the work of protecting investments, and where legal recourse remains uncertain, such as in the wind-power sector, financial instruments can do a lot of the heavy lifting. “You can actually structure financial contracts where you can protect yourself against a downturn of the wind,” says Pascal Storck, head of technology at Vaisala, a global climate-intelligence firm. 

In simple terms, it’s about skimming off the boom times to pay for the bust times. “You want to have a financial hedge where if you have less energy, you’ll have some compensation,” Storck explains. “In order to achieve that, you’re willing to give up some of your revenue in periods of abundance.” 

We must look at how contractual provisions intended to address the extraordinary will function in a world where what was once unusual is now less so.

— Kristina Kopf Thomas and Briana James, Eversheds Sutherland law firm

Energy traders have been making weather-based bets since long before renewables achieved the level of market penetration they have today. Investors in coal, oil and natural gas markets have relied on predictive weather technologies for decades to forecast demand based on temperature. In simple terms, demand goes up in a hot summer or a cold winter, and vice versa. Savvy traders with a good almanac – that is, a service like Speedwell Climate in the United Kingdom, which has provided predictive models to players in these markets since the 1990s – make their bets accordingly. 

Now, energy traders are diversifying their portfolios to include renewables and making bets based not only on demand but on supply. For example, if you know there’s a warm, windy winter on the way, then the value of gas will go down, because people will be burning less for heat and the energy supply from wind power will be greater.

The weather derivatives market, as it’s called, helps answer a fundamental question, according to Storck: “The weather is getting crazy because of the climate, so what do we do about it?” By converting climate risks into investment opportunities, these instruments can help de-risk renewable-power projects and create the stability for more capital to flow into the sector. 

Halting the retreat of insurance

Obviously, insurance providers have a critical role to play in creating protections for climate change, but as the impacts of shifting weather patterns cost more and more, insurance companies are retreating from the markets where they are needed most. 

“The market learns,” says Alex Balcombe, a partner at Harris Balcombe, a U.K.-based insurance claims consultancy. He points to the COVID-19 pandemic, which disrupted supply chains and cost the insurance industry enormously. Afterwards, they stopped covering pandemics. “Insurance companies got their fingers burned massively there, so they’ve learned,” Balcombe says. “You can’t buy insurance for that kind of event anymore.” 

Likewise with climate change, insurers are fleeing areas that are prone to floods, hurricanes and wildfires or charging huge sums for coverage. “These extreme weather events are only occurring on an increasing basis, so there’s certainly a market for cover to be provided, but the question is at what premium and at what level?” Balcombe asks. 

A big part of the answer, Balcombe says, is parametric insurance, a mechanism that converges with the trend toward increasing specificity for weather events in force majeure provisions, and actually serves to simplify coverage. In essence, parametric insurance ties the payout to the event that causes the loss, not the loss itself, and sets a predefined threshold for payment, so there’s no ambiguity or need to negotiate. For example, a factory or warehouse in a flood-prone area might struggle to obtain traditional coverage, but by setting a specific water level to trigger the payment and installing a sensor to verify, they can proceed with adaptations for minor floods and still get coverage for bigger damages. 

“I think parametric insurance is going to become a massive feature, because it’s a much more economic way of doing things, and it gives people certainty,” Balcombe says.

While climate change is dismantling the traditional protections that businesses need, the new solutions are catching up and creating opportunities for companies that are building the post-fossil-fuel economy.

Mark Mann is a Montreal-based journalist and the associate editor at Corporate Knights.

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