Global Giants Are Investing in Clean Tech Despite Political Headwinds

The Trump administration has given corporations plenty of convenient excuses to retreat from their climate commitments, with its moves to withdraw from the Paris Agreement, roll back emissions regulations, and scale back clean energy incentives.

But will the world’s largest corporations follow its lead?

Some multinational companies have indeed scaled back. For instance, Wells Fargo dropped its goal for the companies the bank finances to reach net-zero emissions by 2050, saying the conditions necessary for meeting that goal, such as policy certainty, consumer behavior and the pace of clean technology development, hadn’t fully materialized. Oil giant BP told investors that earlier optimism about a fast transition to renewable energy was “misplaced” given the changing regulatory environment.

However, many others, including the world’s largest retailer, Walmart, aren’t trading their long-term risk planning for Washington’s focus on short-term cost savings. They are continuing their climate policies, but often doing so quietly to avoid scrutiny.

These companies still face ongoing pressure from state and local governments, the European Union, customers and other sources to reduce their impact on the climate. They also see ways to gain a competitive advantage from investing in a cleaner future.

For my new book, “Corporations at Climate Crossroads,” I interviewed executives and analyzed corporate climate actions and environmental performance of Global 500 and S&P 500 companies over the past decade.

These companies’ climate decisions are driven by a complex interplay of pressures from existing and future laws and the need to earn goodwill with employees, customers, investors, regulators, and others.

States wield influence, too

In the U.S., state climate regulations affect multinational corporations. That’s especially true in California – the world’s fourth largest economy and the state with the largest population.

While President Donald Trump dismantles U.S. climate policies and federal oversight, California and the European Union have moved in the opposite direction, becoming the de facto regulators for global businesses.

California’s newly enacted climate laws extend its cap-and-trade program, now called “cap and invest,” which is designed to ratchet down corporate emissions. They also lock in binding targets to reach net-zero greenhouse gas emissions by 2045. And they set clean-power levels that rival the Europe Union’s Green Deal and outpace most national governments.

Other states have joined California in committing to meet the goals of the international Paris climate agreement as part of the U.S. Climate Alliance. The bipartisan coalition of 24 governors, from Arizona’s to Vermont’s, represents over half of the U.S. population.

Several states have been considering “polluters pay” laws. These laws would require companies to pay for their contributions to climate change, with the money going into funds for adaptation projects. Vermont and New York passed similar laws in 2024.

Climate laws still apply in Europe and elsewhere

Outside the U.S., several countries have climate regulations that multinational companies must follow.

The European Union remains a primary driver, though it has recently recalibrated its approach to focus on the largest corporations, reducing the administrative burden on smaller firms. The EU’s broader “Fit for 55” framework aims to cut its emissions by 55 percent by 2030 through policies like binding climate reporting rules. Most notably, the carbon tax for goods entering the EU has, as of January 2026, transitioned from a reporting exercise into a direct financial liability—a shift supported by initiatives to boost competitiveness in clean energy and green infrastructure.

Beyond Europe, companies face similar emissions reporting requirements in the United Kingdom, New Zealand, Singapore, California and cities such as Hong Kong.

While companies can pause their storytelling, they must still invest in the hard data infrastructure required to count their carbon.

While timelines for some of those laws have shifted, the underlying momentum remains. For example, while California temporarily halted a law requiring companies to publish narrative reports on their climate risks (SB 261), the mandate for hard emissions data (SB 253) remains on track for 2026. This “quantitative yes, qualitative maybe” status means that while companies can pause their storytelling, they must still invest in the hard data infrastructure required to count their carbon.

The International Court of Justice gave legal backing to such initiatives in July 2025 when it issued an advisory opinion establishing that countries around the globe have a legal obligation to protect the climate. That decision may ultimately increase pressure on global businesses to reduce their contributions to climate change.

Multinationals put pressure on supply chains

Multinational companies’ efforts to reduce their climate impact puts pressure on their suppliers – meaning many more companies must take their climate impact into consideration.

For instance, U.S.-based Walmart operates over 10,000 stores across 19 countries and is the largest single buyer of goods in the world. That means it faces a wide range of regulations, including tracking and reducing emissions from its suppliers. In 2017, it launched Project Gigaton, aiming to cut 1 gigaton of supply-chain greenhouse gas emissions by 2030. Suppliers including Nestle, Unilever, Coca Cola, Samsung and Hanes helped the company reach its target six years early through practical measures such as boosting energy efficiency, redesigning packaging, and reducing food waste. While the data is verified through internal quality controls co-developed with NGOs like the Environmental Defense Fund, analysts at Planet Tracker note that these “avoided” emissions haven’t yet stopped Walmart’s absolute footprint from rising alongside its business growth.

In early 2025, this growth led Walmart to push back its interim deadlines for two of its most ambitious emissions reduction targets. Despite these delays, Walmart’s “emissions intensity”—the carbon produced per dollar of revenue—has fallen by roughly 47 percent over the last decade. Moreover, almost half of its electricity worldwide came from renewable energy in 2024, its emissions per unit of revenue fell, and it is still targeting zero emissions from its operations by 2040.

There are profits to be made in clean tech

In addition to facing pressure from buyers and governments, companies see profits to be made from investing in climate-friendly clean technology.

Since 2016, investments in clean energy have outpaced that of fossil fuels globally. This trend has only hastened, with nearly twice as much invested in clean energy as fossil fuels in 2025.

Lately, myriad new business opportunities for multinational companies and start-ups alike have focused on meeting AI’s energy demand through clean energy.

From 2014 to 2024, the climate tech sector yielded total returns of nearly 200 percent , and U.S. investment in climate tech was still growing in 2025.

In the first half of 2025, close to one-fifth of the over 1,600 venture deals in climate tech were made by corporations for strategic reasons, such as technology access, supply chain integration, or future product offerings. Corporate strategic deals continued to represent about 20 to 23 percent of all climate tech equity transactions through the third and fourth quarters of 2025.

However, this surge in investment is more than a search for profit; it is a defensive necessity as the tech industry’s growth begins to collide with its environmental limits.

The AI energy paradox

The rapid expansion of AI is forcing multinational companies to make explicit choices about their climate priorities. While tech leaders once relied on annual renewable credits to meet climate targets, the scale of the AI power boom is forcing more rigorous carbon accounting. Global data centers are projected to consume more electricity than Japan by 2030, a shift that turns “voluntary” climate investments into a core business requirement for securing 24/7 energy supplies.

In 2025, the tech giants’ own reports revealed the scale of AI emissions. Microsoft’s 2025 Environmental Sustainability Report revealed a 23.4 percent increase in total emissions since its 2020 baseline. Similarly, Google’s emissions have climbed 51 percent since 2019, with a 22 percent surge in Scope 3 (supply chain) emissions in 2024 alone. Amazon’s 2024 Sustainability Report noted a 33 percent jump since 2019 driven by the construction of new data centers. Meta’s supplier’s emissions (99 percent of its total footprint) are being driven to new heights by the “embodied carbon” of AI hardware.

While high costs might tempt some to cut corners, climate action could instead become a hedge against energy volatility. Companies like Amazon and Google are securing reliable supply by leveraging federal fast-tracking of nuclear permits to act as primary offtakers for the first generation of Small Modular Reactors (SMRs). This shift is accelerated by new federal orders to bypass nuclear licensing hurdles, as seen in Google’s landmark agreement with Kairos Power and Amazon’s $500 million investment in X-energy—deals designed to secure the 24/7 “baseload” power AI requires without abandoning carbon-free commitments. Despite their advanced designs, SMRs are still provoking debate over their radioactive waste and the potential risks of deploying nuclear technology closer to populated industrial hubs.

Companies look to their customers and the future

As climate risks grow alongside political headwinds, companies are facing both pushes toward and pulls away from protecting the planet from catastrophic effects. Oil and gas companies, for example, continue to invest in new oil and gas development. However, they also forecast renewable energy growth accelerating and are investing in clean tech.

The corporate leaders I interviewed, from tech companies like Intel to sporting goods and apparel companies like Adidas, talked about aligning sustainability efforts and initiatives across their business globally whenever possible. This proactive approach allows them to more seamlessly collect data and respond to pressures arising domestically and globally, minimizing the need for costly patchwork efforts later. Moreover, global businesses know they will continue to face demands from their customers, investors and employees to be better stewards of the planet.

AI-powered consumers are increasingly demanding responsible business and accountability on corporate net-zero pledges

In a 2025 Getty Images survey of over 5,000 consumers across 25 countries, more than 80 percent of respondents reported that they expect clear ESG guidelines from businesses. Furthermore, these consumers—from Brazil, Australia and Japan to the UK and US—are increasingly using GenAI-driven shopping assistants to filter for “responsible business” practices.

U.S. market research from the Hartman Group corroborates this trend: 71 percent of surveyed food and beverage consumers consider environmental and social impacts in their purchasing decisions. They increasingly demand credible, tangible, and verifiable evidence. When claims carry third-party certifications, consumers demonstrate significantly higher trust , whereas vague or unsupported claims fuel skepticism.

In 2026, the “Climate Crossroads” is a line item on the corporate balance sheet. The divergence between federal deregulation in Washington and the rigid physical demands of the AI revolution has created a new era of corporate pragmatism. While some firms may use political shifts to “greenhush” or delay abstract pledges, the world’s largest corporations are finding that they cannot simply account away the massive energy and infrastructure requirements of the AI Age. AI-powered consumers are increasingly demanding responsible business and accountability on corporate net-zero pledges. In this new landscape, the global businesses that thrive will be those that build carbon-free foundations, while responding to existing and future laws across the globe.

This article is adapted by the author from The Conversation under a Creative Commons license. Read the original article.