Apr 25, 2025 / By Melissa McClements
Earth Day, held each year on April 22, has served as an annual alarm call for business and society to protect our ailing planet since 1970. However, this year, the event took place against a backdrop of the new U.S. administration’s withdrawal from the Paris Agreement and mass dismantling of environmental protections felt across the globe.
While public environmental protests took place across the U.S., in line with the event’s 2025 theme of ‘Our Power, Our Planet’, the mood in corporate circles was more muted. Indeed, since Trump’s election win, business leaders have seemed nervous to publicly counter his “drill, baby, drill” push for more fossil fuels. For example, Walmart, Siemens and Apple have stepped back from supporting the climate action coalition America Is All In.
But can businesses really afford to backtrack on climate?
Climate action is too expensive
The argument against corporate climate action is that it’s not economically viable. Even if this were the case, it makes no sense. Will we tell our children that saving life on Earth was simply too expensive? And that’s not even true. Countless studies show that it’s significantly less costly to address climate change than to let it spiral out of control. For instance, a recent study by the Organization for Economic Co-operation and Development showed that a third of global GDP could be lost this century if the climate crisis runs unchecked. Research from the University of Cambridge, U.K., put the figure up to 27%.
Indeed, the lifetime’s work of the two most prominent climate economists—Nobel-Prize-winning Professor Joseph Stiglitz of Columbia University, New York, and Professor Nicholas Stern of the London School of Economics—comprehensively concludes that the financial benefits of climate action hugely outweigh those of inaction, even in the short term.
The airline industry is an example
Companies may currently be tempted to roll back their climate commitments, but they should think twice. Taking one sector as an example, the aviation industry has committed to becoming net zero by 2050 through the International Air Transport Association’s (IATA’s) pledge. However, some airlines, like Air New Zealand, were already rolling back their climate goals before the change in U.S. presidency, due to concerns about the supply of sustainable aviation fuels (SAFs), which form the central plank of the sector’s decarbonization strategy.
Undoubtedly, there are challenges around the supply of SAFs because they’re made from plant-based feedstock that requires vast tracts of land to grow. However, new research concludes that the cost of inaction is higher than investing in research and development to scale SAFs, due to the EU Emissions Trading System, a market-based mechanism that aims to reduce greenhouse gas emissions by setting caps on those from specific sectors.
The free carbon allowances that airlines have enjoyed are being phased out, so they will pay for the entirety of their emissions by 2026. In Europe, these costs are set to become the largest component of fuel cost growth, surpassing even penalties for non-compliance. And the financial impacts will be felt across the Atlantic and worldwide, too.
Climate leadership through collaboration
Forward-thinking businesses in the aviation sector understand that a historic shift is underway and are significantly investing in SAFs. A prime example is the recent extension of the partnership between airline giant IAG—which owns British Airways, Iberia and Aer Lingus—and Microsoft to co-fund the purchase of SAFs until the end of the decade. The largest deal yet between an airline and a corporate client aiming to reduce its emissions from business travel, this kind of collaboration is how SAFs can become the new norm.
We need such collaborative thinking to permeate the entire sector, because the will to embrace the energy transition is there. More than seven in 10 travel industry leaders said that the recent political backlash against ESG governance efforts has had no impact on sustainability efforts within their organizations, according to a new report from non-profit Travalyst. Now they need to drive systemic change together.
The transition is inevitable
With scientists clear that we are hurtling towards irreversible climate tipping points, the energy transition is urgent and inevitable. In this context, reneging on sustainability commitments makes no sense. Thankfully, some investors seem to understand this reality. Despite punishing policy changes and the business world’s quiet response, set against a wider backdrop of tariff-induced market turmoil, venture capital climate investments have not dropped (though we don’t know if they will return to the heights we’ve seen previously).
Climate-focused startups saw their valuations and deal sizes rise through the first quarter of 2025, marking the third consecutive quarter of growth. This appears to be fueled by the soaring electricity consumption of the data centers that power the internet, surging demand for resilient on-site power systems, and continued investment in corporate decarbonization efforts.
This is the kind of active hope we all need and that optimism does matter, but in the same breadth, acknowledgement that progress remains vulnerable. Despite the US administration's efforts to the contrary, now is not the moment to let all the climate progress we have made be lost.
The mission of the new Climate Realism Initiative urges us to find better and more practical approaches to action: new thinking, stronger partnerships, and a collective commitment to solutions that deliver measurable impact to save our planet.
Because the alternative is not only less profitable, but also unsustainable.
Isn’t it time to accept that killing the planet is bad business?
