Amid fears of an economic downturn, there is growing concern that large corporations are scaling back their sustainability commitments, particularly in the environmental, social, and governance (ESG) areas. Reports indicate that several major companies, especially in sectors like consumer goods, technology, and finance, have begun downsizing their sustainability departments.
For example, Unilever, known for its strong focus on sustainability, recently reduced its global sustainability workforce by about 15% as part of a broader strategy to streamline operations in response to inflation and supply chain disruptions. This trend raises questions about the future of corporate ESG commitments and whether these cutbacks signal a shift in priorities during uncertain economic times.
Similarly, Microsoft announced a restructuring that affected its sustainability and ESG teams. Although specific numbers were not disclosed, sources indicate that up to 10% of the sustainability team was impacted. This move is part of a larger effort to refocus on core business areas amidst economic uncertainty. Meta, formerly known as Facebook, also scaled back its sustainability initiatives as part of a broader layoff of over 10,000 employees, according to sources. Although sustainability was not the primary target, roles related to sustainability reporting and green technology were eliminated as the company sought to streamline operations and cut costs.
HSBC has also reportedly reduced its sustainability team, aligning with a strategic shift to concentrate on core financial services amidst a slowing economy. The bank’s decision reflects a broader trend in the financial sector, where companies are reevaluating non-core functions during periods of financial uncertainty. The exact figures of the job cuts were not widely reported, but the downsizing indicates a prioritisation of immediate financial stability over long-term sustainability commitments. Even Disney, traditionally seen as a leader in corporate responsibility, announced job cuts across various departments as part of a cost-cutting drive to save $5.5 billion. However, there was no specific mention of sustainability teams being directly impacted, indicating that the focus may be more on overall cost reduction rather than a targeted move against sustainability efforts.
Amazon has reduced some initiatives within its Climate Pledge division. Reports indicate that this included layoffs, although specific details about the number of sustainability roles affected remain unclear. The shift indicates a possible focus on immediate financial goals over longer-term sustainability targets.
The reduction in sustainability teams raises concerns about the ability of companies to meet their sustainability targets. Smaller teams may struggle to handle the wide range of tasks necessary to reduce carbon footprints, manage sustainable supply chains, and engage with stakeholders effectively. Reduced staffing could also stifle innovation, as fewer resources are available to develop and implement new sustainability strategies and technologies.
The broader sustainability movement may also face setbacks. As key players in driving large-scale environmental and social changes, corporations play a critical role. A reduction in corporate commitment could result in slower progress on global sustainability objectives, including the United Nations’ Sustainable Development Goals (SDGs) and mitigating climate change risks.
The future remains uncertain, with some experts predicting further cuts as companies continue to navigate economic challenges. However, there is cautious optimism that as the realities of climate change become more pressing, both companies and investors will recognise that sustainability is not just an ethical choice but also a strategic imperative.
Some companies appear to be adjusting their sustainability strategies rather than abandoning them. Instead of maintaining large, dedicated teams, they are integrating sustainability responsibilities into broader roles, aiming for a more embedded approach to ESG practices. This approach could create a more resilient sustainability strategy, less susceptible to economic pressures.
The trend of reducing sustainability staff in large companies is troubling for those who value corporate responsibility, governance and stewardship. Rajesh Chhabara, founder and managing director of CSRWorks International and an experienced sustainability consultant, expressed concern over the recent trend of cutting sustainability teams. “These job cuts reflect a worrying shift in corporate priorities,” he noted. “While companies face genuine economic pressures, reducing investment in sustainability can have serious long-term consequences. It not only undermines their ability to innovate and respond to market demands but also increases risks such as regulatory backlash, reputational damage, and loss of investor trust. Sustainability is not just a cost—it’s a critical component of business resilience and future growth. Companies need to understand that cutting back now could jeopardise their prospects and expose them to greater vulnerabilities in the long run.”