Now that we’ve had some time to digest the results of the 2024 US election, we’re ready to share our perspective on what’s coming for the corporate climate world. Optera’s leadership team has met with lawmakers, investors, legal advisors, and clients over the past several weeks, and we want to share what we’ve learned, what we’ve come to expect from a second Trump administration, and how it will affect the work we do with our clients.
Let’s be clear about what has – and hasn’t – changed. “The only thing that we believe has changed with this new administration is it added more uncertainty to the timing of our transition to the low carbon economy,” says Tim Weiss, Optera CEO. “It doesn’t change whether that transition will happen or not.”
The global movement toward decarbonization continues, driven by a complex web of market forces that extend far beyond any single administration’s policies.
Those forces include:
- Market pressures from customers and business partners
- Sustained investor focus on climate risk and opportunity
- Employee and consumer expectations for corporate environmental leadership
- International regulatory momentum, particularly from Europe
- Progressive state-level climate initiatives across the US
What we’re witnessing needn’t be a reversal of climate action, but rather a redistribution of influence. As federal leadership potentially recedes, other stakeholders – from state governments to institutional investors – are likely to amplify their voices and increase their pressure on corporations to maintain and accelerate their climate commitments.
For corporate leaders, this creates a strategic imperative: maintaining robust climate programs isn’t just about compliance. And truthfully, it never has been – it’s about market competitiveness, risk management, and long-term business resilience. The risk of backtracking on climate commitments may now outweigh the challenges of staying the course.
In this analysis, we’ll explore the evolving policy landscape, predict key market developments, and outline strategic considerations for corporate climate programs under a potential second Trump administration. Our goal is to provide a clear-eyed assessment of both challenges and opportunities, helping business leaders navigate this period of transition with confidence and strategic clarity.
Federal policy outlook
Status of the Inflation Reduction Act: Neutral to negative
The Biden administration’s Inflation Reduction Act (IRA) is the most significant federal climate policy in decades, and its future is somewhat murky. We believe a full repeal is unlikely for some compelling reasons:
- Significant IRA funding has already been allocated to projects in Republican districts, creating vested local interests
- The previous Trump administration’s failed attempt to repeal the Affordable Care Act showed just how challenging it is to unwind established programs
- A notable coalition of 18 House Republicans has explicitly warned against IRA repeal, not to mention the IRA’s widespread support among Democrats
However, specific components of the IRA face heightened scrutiny, particularly its funding mechanisms and tax credits:
- The Investment Tax Credit (ITC) and Production Tax Credit (PTC) could become targets for revision, as these credits might be viewed as potential funding sources for the tax cuts that Trump promised during his campaign
- Implementation and enforcement priorities could shift even without formal legislative changes
The good news is that significant IRA funding has already been allocated, and teams are working around the clock to allocate as much additional funding as possible before the change in administration on January 20.
Status of the SEC climate disclosure rules: Negative
The Securities and Exchange Commission’s climate disclosure regulations already faced significant headwinds, as they were challenged in court almost immediately after being approved earlier this year. With Trump in the White House, those legal challenges are likely to continue and escalate.
- Supreme Court review appears probable, with an unfavorable ruling anticipated
- Companies should prepare for a more fragmented disclosure landscape dominated by state-level and market-driven requirements
State policy outlook
As federal climate action stalls, state governments are emerging as increasingly influential drivers of corporate climate policy.
Status of California SB 253 and 261: Neutral
California maintains its position at the vanguard of climate policy, particularly through its groundbreaking corporate disclosure requirements. Despite legal challenges, implementation of these requirements continues on schedule, creating de facto national standards due to California’s market size. Companies doing business in California, regardless of headquarters location, must prepare for comprehensive emissions disclosure requirements, climate risk reporting, and transition plan documentation.
Other states: Positive and negative
The broader state-level policy landscape reveals an increasingly pronounced divergence in climate action. A coalition of approximately 25 states, including Washington and Massachusetts, has established aggressive climate goals and continues to advance various initiatives. Washington is expanding clean energy requirements, while Massachusetts implements new building standards. However, this progressive momentum is counterbalanced by states like Arizona and Louisiana, which are actively modifying their environmental regulations and shifting energy policy priorities.
This regional divergence creates complexity for corporations, particularly those with multi-state operations. Companies must now navigate varying – and sometimes conflicting – requirements across different jurisdictions. The challenge isn’t simply about compliance; it’s about developing flexible strategies that can adapt to an increasingly fragmented regulatory landscape while maintaining consistent corporate climate commitments.
International policy outlook
European climate regulations aren’t going anywhere, and that regulatory spill-over will continue to impact American companies. Regulations that will take effect during the second Trump administration, or have recently taken effect, include:
- CSRD: Large companies operating in the EU must disclose detailed information about their impact on the environment and local communities
- CBAM: Companies must report the emissions of carbon-intensive products they import into the EU, and starting in 2026, must also pay a tariff on those goods
- CSDDD: Companies operating in the EU must conduct detailed due diligence across their entire value chain relating to the environment and human rights
Renewable energy infrastructure
Despite broader political divisions on climate policy, both parties see a looming energy crisis and are motivated to avert it. Further development of AI data centers, plus the on-shoring of manufacturing, will require massive new energy to come online, creating potential openings for meaningful progress even in a politically charged environment.
The transmission challenge
One of the most promising areas for bipartisan action is transmission line permitting. There’s growing recognition across the political spectrum that modernizing and expanding America’s transmission infrastructure is crucial for both economic competitiveness and energy security. Improvements to the permitting process could accelerate development timelines and unlock significant private investment in energy infrastructure.
A nuclear renaissance
The energy landscape may see a notable shift toward nuclear power, with renewed interest from both environmental advocates and energy security proponents. This “nuclear renaissance” represents a significant departure from previous decades of skepticism. The technology enjoys increasingly bipartisan support, particularly as concerns about grid reliability and baseload power generation grow. While mature renewable technologies like wind and solar continue to expand based on positive ROI, nuclear power could emerge as a crucial complement in the broader energy mix.
New green tech
Mature decarbonization solutions – particularly solar, wind, and battery storage – maintain their growth trajectory, propelled by favorable economics and positive returns on investment. However, less mature technologies like green fuels and carbon capture face a more challenging path, with economics that are not yet scalable and competitive. This bifurcation between proven and emerging technologies will shape the energy landscape in the years ahead.
Market forces beyond regulatory pressure
The conversation around corporate climate strategy often focuses heavily on regulatory requirements, particularly SEC disclosure rules. However, this narrow focus misses a crucial reality: market forces and stakeholder expectations were already the primary drivers of corporate climate action, and these forces are likely to intensify rather than diminish under a new administration. “The forces at play are not going to go away,” Tim says. “They may actually increase and amplify in many areas, because we have an administration that is not a leader on climate. Other people will step in.”
The stakeholder imperative
In the absence of strong federal leadership on climate issues, other stakeholders are poised to amplify their influence. Investors, in particular, are likely to become even more vocal advocates for corporate climate action, viewing it as essential to long-term value creation and risk management. Customer demands for environmental responsibility continue to grow, particularly in B2B relationships where supply chain emissions and sustainability credentials increasingly factor into purchasing decisions.
The risk of retreat
Perhaps most significantly, market dynamics have reached a point where retreating from climate commitments may pose greater risks than maintaining them. Companies that backtrack on their environmental programs face potential backlash from multiple stakeholders simultaneously – from investor scrutiny to customer criticism to employee dissatisfaction. This creates a powerful incentive for maintaining and even accelerating climate initiatives, regardless of the regulatory environment.
The key message for corporate leaders is clear: while federal policy may shift, the fundamental market forces driving corporate climate action remain firmly in place. In many ways, these forces may actually strengthen in response to reduced federal leadership, as other stakeholders step forward to fill the vacuum.
Next steps for corporate climate programs
In times of policy uncertainty, the strategic imperative for businesses isn’t to retreat from climate commitments, but rather to nail the fundamentals. “It is more risky to backtrack than it is to stay the course,” Tim says. You need a plan and market credibility, and that requires:
- Transparent, specific emissions data
- Decarbonization strategy
- A team with strong expertise and solid budget at their disposal
- Demonstrated progress over time
Building strong foundations
We recommend companies focus on building robust internal capabilities while maintaining a measured public presence. This means investing in fundamental program elements that will prove valuable regardless of the regulatory environment. The priority should be developing high-quality, auditable emissions data across all scopes – not because regulations demand it, but because it enables better business decision-making and prepares the company for future opportunities and challenges.
But your strategy shouldn’t start and end with data—that’s just the first step. It’s what you do with the data that matters. “Having robust, auditable, and actionable scope 1, 2, and 3 means having a true decarbonization plan,” says Tim “It means having a true understanding of where your risks and opportunities lie across climate and environmental issues.” That leads to developing actionable strategies tied to business operations, supported by clear metrics and timelines. Companies should focus on building the infrastructure, team capabilities, and internal processes needed to execute these plans effectively. This might mean investing in data management systems, developing internal expertise, or strengthening cross-functional coordination.
Looking ahead
The most successful companies will be those that use this period of transition to strengthen their fundamental capabilities while maintaining strategic flexibility. By building robust internal programs now, businesses will be well-positioned to adapt to evolving stakeholder expectations and capitalize on emerging opportunities, regardless of the regulatory environment.
Remember: in the current climate, it’s more risky to backtrack than to stay the course. The goal should be to emerge from this period of uncertainty with stronger, more resilient climate programs built on sound business fundamentals.
