Trump’s Greenhouse Gas Rollback: Implications for Confusion and Potential Cost Increases

The Trump administration’s decision to overturn an Obama-era legal analysis underpinning greenhouse gas rules is expected to create confusion and increase costs for businesses and investors, according to shareholder advocates and portfolio managers.

U.S. President Donald Trump, who has labeled climate change a “hoax,” plans to formally rescind the 2009 scientific findings that linked carbon dioxide to health risks. This data has informed pollution standards for over 15 years.

This rollback represents the most extensive climate change policy reversal by the Republican administration to date. It follows a series of regulatory cuts aimed at promoting fossil fuel development while hindering the advancement of clean energy initiatives.

Asset managers and shareholder activists express concern that this move will leave companies uncertain about future compliance requirements, especially under a potential future administration. However, large multinational corporations will likely continue to adhere to stricter emissions standards globally.

“This rollback creates profound uncertainty for companies that have already invested billions in emissions reduction,” stated Marcela Pinilla, director of sustainable investing at Zevin Asset Management. “We’re interrupting a trajectory toward a low-carbon economy just as companies have committed substantial capital to that transition. Those reversing course face stranded asset risk if policies change again.”

STOP-START PLANNING

Beth Williamson, head of sustainable equity research at Calamos Investments, noted that this decision “adds another layer of regulatory uncertainty for carbon-intensive industries,” potentially shifting risk elsewhere. Such “stop-start” planning can introduce volatility into the supply chain, impacting upstream providers in sectors like semiconductors, power electronics, and industrial equipment.

Andrea Ranger, director of shareholder advocacy at Trillium Asset Management, emphasized that the repeal could complicate investors’ ability to identify successful companies during the transition, creating uncertainty for firms with significant capital expenditure plans. “If the next administration comes in and says, ‘yep, we’re going to do this again,’ it’s the whiplash effect,” she warned.

Jonathan Pragel, executive director at Calvert Research and Management, part of Morgan Stanley Investment Management, added that the reversal would incur additional operational costs that many company boards may be reluctant to absorb. “The cost of eliminating this infrastructure, and then needing to rebuild it if there is another change in the reporting regime, is a really expensive proposition,” he explained.

Despite these challenges, commitments by U.S. companies to achieve net-zero emissions by 2050 have increased by 9% in 2025, according to data from the non-profit Net Zero Tracker. This includes 304 firms in the Forbes Global 2000 index, up from 279 the previous year.

INVESTOR PRESSURE

While automakers may gain some relief from federal reporting requirements, their investors and international regulators will continue to demand accountability. “Investors will keep making clear that managing climate risk is essential to protecting both shareholders and the bottom line,” said Giovanna Eichner, shareholder advocate at Green Century Capital Management. “Losing this finding weakens accountability, but not investor resolve. Climate risk still threatens shareholder value and company profits alike.”

For instance, German automaker BMW, headquartered in the European Union, will still need to comply with disclosure and emissions requirements there, regardless of U.S. regulations. A spokesperson noted, “Therefore, the changed U.S. regulation might not have a big influence on us as a global player.”

Rachel Delacour, CEO of sustainability data management platform Sweep, remarked, “We know from the companies we work with that those who are pulling ahead are integrating ESG data into how they run their business, not just how they report on it. That’s the competitive advantage.”

LEGAL CHALLENGES

The repeal is also susceptible to legal challenges, especially after a federal court ruled in January that the Department of Energy violated the law when it formed a climate science advisory group to support the repeal attempt.

Mark Wade, head of sustainability research and stewardship at Allianz Global Investors, pointed out that many large companies with international investors would be reluctant to lose them. “These U.S. companies are now so big they need non-U.S. investors. If you start to remove that incremental buyer of risk, that’s a problem for share price valuations,” Wade said.

Despite the Trump administration’s retreat on climate policy, many U.S. companies continue to adapt their operations for a low-carbon future, albeit more quietly. While the planned EPA repeal is “very unhelpful,” many large U.S. firms are still looking to profit from the energy transition. “If you find the next nuclear fusion or hydrogen solution, you’re the next billionaire,” Wade concluded.

The Trump administration’s decision to overturn an Obama-era legal analysis underpinning greenhouse gas rules is expected to create confusion and increase costs for businesses and investors, according to shareholder advocates and portfolio managers.

U.S. President Donald Trump, who has labeled climate change a “hoax,” plans to formally rescind the 2009 scientific findings that linked carbon dioxide to health risks. This data has informed pollution standards for over 15 years.

This rollback represents the most extensive climate change policy reversal by the Republican administration to date. It follows a series of regulatory cuts aimed at promoting fossil fuel development while hindering the advancement of clean energy initiatives.

Asset managers and shareholder activists express concern that this move will leave companies uncertain about future compliance requirements, especially under a potential future administration. However, large multinational corporations will likely continue to adhere to stricter emissions standards globally.

“This rollback creates profound uncertainty for companies that have already invested billions in emissions reduction,” stated Marcela Pinilla, director of sustainable investing at Zevin Asset Management. “We’re interrupting a trajectory toward a low-carbon economy just as companies have committed substantial capital to that transition. Those reversing course face stranded asset risk if policies change again.”

STOP-START PLANNING

Beth Williamson, head of sustainable equity research at Calamos Investments, noted that this decision “adds another layer of regulatory uncertainty for carbon-intensive industries,” potentially shifting risk elsewhere. Such “stop-start” planning can introduce volatility into the supply chain, impacting upstream providers in sectors like semiconductors, power electronics, and industrial equipment.

Andrea Ranger, director of shareholder advocacy at Trillium Asset Management, emphasized that the repeal could complicate investors’ ability to identify successful companies during the transition, creating uncertainty for firms with significant capital expenditure plans. “If the next administration comes in and says, ‘yep, we’re going to do this again,’ it’s the whiplash effect,” she warned.

Jonathan Pragel, executive director at Calvert Research and Management, part of Morgan Stanley Investment Management, added that the reversal would incur additional operational costs that many company boards may be reluctant to absorb. “The cost of eliminating this infrastructure, and then needing to rebuild it if there is another change in the reporting regime, is a really expensive proposition,” he explained.

Despite these challenges, commitments by U.S. companies to achieve net-zero emissions by 2050 have increased by 9% in 2025, according to data from the non-profit Net Zero Tracker. This includes 304 firms in the Forbes Global 2000 index, up from 279 the previous year.

INVESTOR PRESSURE

While automakers may gain some relief from federal reporting requirements, their investors and international regulators will continue to demand accountability. “Investors will keep making clear that managing climate risk is essential to protecting both shareholders and the bottom line,” said Giovanna Eichner, shareholder advocate at Green Century Capital Management. “Losing this finding weakens accountability, but not investor resolve. Climate risk still threatens shareholder value and company profits alike.”

For instance, German automaker BMW, headquartered in the European Union, will still need to comply with disclosure and emissions requirements there, regardless of U.S. regulations. A spokesperson noted, “Therefore, the changed U.S. regulation might not have a big influence on us as a global player.”

Rachel Delacour, CEO of sustainability data management platform Sweep, remarked, “We know from the companies we work with that those who are pulling ahead are integrating ESG data into how they run their business, not just how they report on it. That’s the competitive advantage.”

LEGAL CHALLENGES

The repeal is also susceptible to legal challenges, especially after a federal court ruled in January that the Department of Energy violated the law when it formed a climate science advisory group to support the repeal attempt.

Mark Wade, head of sustainability research and stewardship at Allianz Global Investors, pointed out that many large companies with international investors would be reluctant to lose them. “These U.S. companies are now so big they need non-U.S. investors. If you start to remove that incremental buyer of risk, that’s a problem for share price valuations,” Wade said.

Despite the Trump administration’s retreat on climate policy, many U.S. companies continue to adapt their operations for a low-carbon future, albeit more quietly. While the planned EPA repeal is “very unhelpful,” many large U.S. firms are still looking to profit from the energy transition. “If you find the next nuclear fusion or hydrogen solution, you’re the next billionaire,” Wade concluded.