Missing The Opportunity of The Century?

Author

Tim Mohin
August 01, 2025

What’s in this week’s newsletter:

  1. China dominates in clean tech, while the US embraces fossil fuels

  2. The Trump Administration’s climate “dagger” - ending the “endangerment finding” 

  3. What sustainability recession? Revisiting last week's viral debate

  4. Europe simplifies sustainability reporting standards

  5. Florida slaps CDP and SBTi with subpoenas in the latest anti-ESG crackdown

The U.S. and those that follow their fossil fuel-centric policies are “missing the greatest economic opportunity of the 21st century.” Those were the words of UN Secretary General Antonio Guterres last week.  

He was referring to the changes in the recently enacted “One Big Beautiful Bill,” calling them a “market distortion” that subsidizes fossil fuels 9 to 1 against renewables. A policy that is bound to “fail, because we have passed the point of no return.”

Guterres was referring to the fact that 92.5% of new electricity capacity in 2024 was from renewable sources. This was driven mainly by China, which has embraced clean tech, opening a huge gulf in energy policies between the world’s two largest economies. China is by far the world’s leading producer and exporter of clean tech, and is spending big on foreign investment projects for clean energy.

The US, on the other hand, is pressuring governments to increase their US oil and gas investments. They are pressing the Japanese and South Korean governments to invest billions in an Alaskan pipeline, and as part of their trade agreement, the EU has agreed to increase oil and gas imports by 300%.

With oil hovering at $69 a barrel and the energy mix still fossil fuel-heavy, the Trump Administration is moving quickly to shore up US oil and gas dominance. All told, provisions in Trump’s domestic policy bill passed this month will save the oil and gas industry roughly $18 billion in new and expanded tax benefits.

Fossil fuel subsidies work in the short term because 80% of global energy needs are still reliant on fossil fuels. But the International Energy Agency (IEA) expects this reliance to decrease to under 60% by 2050, with Chinese tech taking a larger share. 

The gap is already growing: new research from Wellesley College’s The Big Green Machine found that since January, thirty-four US clean tech projects, worth more than $30 billion, have been paused, delayed, or canceled.

China is also widening the competitive gap on electric vehicles (EVs). China’s EV manufacturers are building factories from Brazil to Turkey, and China recently took over the top spot as the world’s largest car exporter. In the US, the removal of EV tax credits and new tariffs on materials are forcing the auto industry to rethink its strategies. For example, GM reversed its plans to build an EV factory in Buffalo and instead invested in a new V8 factory.

Coal, gas, and oil powered the stunning growth of the 20th century. The consensus forecast is that renewables will fuel the 21st century. Solar is already the fastest-growing power generation source in the history of electricity, and utility-scale solar is now the cheapest source of new electricity in over 80% of the world, including the U.S., EU, China, India, and Latin America. If these trends continue, the US's bet on fossil fuels could miss the biggest opportunity of this century. 

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2. “A Dagger into the Heart” for US Climate Action

The US Environmental Protection Agency (EPA) proposed to rescind their ‘endangerment finding’ this week. This is the scientific finding reached back in 2009 showing that greenhouse gases (GHG) are a danger to human health. Without this finding, the EPA will have no authority to limit GHG emissions, and all existing rules forcing companies to track and limit emissions will be overturned. 

The proposal was announced along with a Department of Energy report claiming: “CO₂-induced warming appears to be less damaging economically than commonly believed, and that aggressive mitigation strategies may be misdirected.” Shortly before the report was unveiled, EPA Administrator Lee Zedlin said that this would be “the largest deregulatory action in the history of America,” and would “drive a dagger into the heart of the climate change religion.”

A series of public hearings is scheduled this month, and the comment period for the proposal closes September 15th. 

Once finalized, environmental groups will sue. Former Obama climate advisor Jody Freeman said: “These rules go to the D.C. Circuit Court of Appeals because that’s what the Clean Air Act says, and usually it would take about a year or so for a D.C. Circuit decision to happen. So now you’re in 2027,” alluding to the fact that the proposal will be tied up in the courts until after the mid-term elections. 

Even before this plays out, industries are avoiding air pollution limits through a new fast-track process. By simply sending an email, more than 25 facilities have been exempted from EPA pollution limits for mercury and other toxic air pollutants. 

3. EU Issues Revised Reporting Standards

The European Financial Reporting Advisory Group (EFRAG) released the ‘simplified’ version of Europe’s Sustainability Reporting Standards (ESRS) for public comment. These are the reporting standards that must be used by companies covered by Europe’s Corporate Sustainability Reporting Directive (CSRD) 

There is a lot of content to dig through with 12 exposure drafts (2 cross-cutting and 10 topical standards). The main takeaway is that the data points that must be reported were cut by 57%. Voluntary data points were also removed, adding up to a total cut of 68% which EFRAG claims makes the standards more “accessible and implementable.”

Chair of the EFRAG Sustainability Reporting Board Patrick de Cambourg said, “These revisions aim to deliver what Europe needs at this moment: a more focused, more usable sustainability reporting system that remains ambitious but does not overburden companies.” The 60-day comment period will close on September 29th, after which the standards will be finalized by November 30th. 

The European Commission also announced the adoption of the voluntary standard for Small to Medium-sized Enterprises (VSME). 

The idea is to provide a ‘lite’ version of the ESRS. Smaller companies not covered by the CSRD can use these standards to voluntarily report in a comparable and consistent manner. It also defines the information that larger companies and financial institutions affected by the CSRD can ask smaller companies in their value chains.

The definition of what constitutes a smaller company is in flux right now. The current “Omnibus simplification” proposals increase the threshold from 250 employees to 1,000, but some have suggested the threshold be increased to 3,000.

4. What Sustainability Recession?

Last week’s newsletter clearly struck a chord. Despite all of the data we shared, as John Elkington said in the comment section, “The sustainability recession is very real. It’s influencing priorities and behaviors.” I was also challenged by Ken Pucker on the question of whether it matters if there is a sustainability recession and whether businesses were ever truly sustainable anyway. 

While I shared my own perspective in the comments (I love a good debate) - the take-home message never changed: companies continue to invest in ‘corporate responsibility.’ This is a decades-long trend that has weathered many ups and downs…and clearly this is a down cycle. 

Some followers wrote in to share research I overlooked last week, such as an EcoVadis study from a few weeks ago, which indicates that 87% of companies plan to increase their sustainability spending but will remain silent about it. Another interesting spin came from this article - the thrust is that we have to move past ‘business-value’ justifications and move into the strategic value of sustainability. 

It is wonderful to create a town square for sustainability professionals in these uncertain times. Keep the comments coming!

5. Florida Subpoenas CDP and SBTi

Florida’s attorney general James Uthmeier subpoenaed the Science Based Targets initiative (SBTi) and CDP this week, claiming they violated state consumer protection and antitrust law.

Specifically, the claim is that CDP and SBTi “coerc[ed] companies into disclosing proprietary data and paying for access under the guise of environmental transparency,” and that the state is “defending free enterprise and protecting consumers from fraudulent ESG schemes masquerading as science.”

Cynthia Hanawalt, of the Sabin Center for Climate Change Law, said the subpoena is hard to assess because a complaint has not yet been filed in court, adding that these “investigations have had a chilling effect on financial institutions that had been participating in groups focused on setting net zero standards. Perhaps that is the goal again here.”

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer. 

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