ESG, Diversity, and the return of Trump

Donald Trump’s return to the White House has set off a chain reaction that every CFO and board director should be watching closely. It’s no longer just tariffs and tax policy on the table — it is the strategic foundations of corporate responsibility and governance.

ESG, boardroom diversity, and corporate activism are squarely in the crosshairs and that presents a serious challenge to financial leaders:

How do you maintain credibility in markets heading in opposite directions?

ESG in a Split World

The ESG framework was always meant to be about resilience and long-term value creation — not to serve as a platform for superficial moral posturing. At its core, ESG helps boards, investors, and the public understand how a company performs on environmental impact, social responsibility, and governance. Done right, it’s a risk lens. A signal of operational maturity and strategic foresight.

But for Australian companies with U.S. operations or global investor exposure, Trump’s second term creates a strategic fault line.

On one side, Australia and Europe are pressing ahead with emissions targets, mandatory climate disclosures, and board accountability. On the other, the U.S. is reversing course — stripping back ESG regulation, fuelling anti-DEI sentiment, and recasting sustainability as ideological overreach.

The result? CFOs are now operating in two ESG universes — one pushing forward, the other pulling back.

One Company, Two Realities

So, what should CFOs do?

The answer isn’t two ESG policies. It’s one globally coherent strategy with market-specific execution. That means:

• Global values, local disclosures. Anchor your ESG framework in principles like resilience, risk mitigation, and long-term value. But tailor reporting and messaging to what’s expected in each jurisdiction. U.S. filings may now omit climate disclosures — but global investors still expect transparency.
• Avoid greenhushing. Unlike greenwashing (overstating ESG), greenhushing is when companies deliberately underreport or avoid talking about legitimate environmental or social efforts. This silence, often meant to avoid political backlash, creates reputational risk and erodes trust. Speak clearly — and speak in financial terms.
• Respect stakeholder differences. U.S. markets may penalise ESG advocacy; Australian and European investors may penalise ESG retreat. CFOs must walk a tightrope — articulating strategy in the language of business, not ideology.

The Diversity Flashpoint

Diversity mandates in the U.S. are under renewed legal and political attack. The message is clear: government-enforced “wokeness” is out. The focus on maximising shareholder value is back.

Boardroom diversity — a cornerstone of the “S” and “G” pillars — is now another flashpoint. Diversity is no longer just encouraged; it’s expected. Proxy advisers demand it. ASX companies are assessed on it. Media headlines applaud it.

And yet, a hard question remains: Are we building better boards — or just better optics?

When diversity becomes a compliance exercise, rather than a strategic imperative, it can backfire — for boards, for businesses, and for the directors themselves. True boardroom diversity goes far beyond gender or ethnicity. It’s about:

• Intellectual independence
• Lived experience
• Global perspective
• The courage to challenge consensus

I’ve seen board appointments made to tick boxes or satisfy ESG expectations — not because the candidate had the strategic insight or governance skills the company actually needed. That does no one any favours. It weakens the board.

The best boards focus on functional diversity — the kind that improves decision-making. A board that looks different because it thinks differently.

And the CFO should be central to that evolution. Diversity isn’t just a social good — it’s a hedge against strategic groupthink.

The CFO’s Role in the New Landscape

In this new climate, CFOs must do more than manage the numbers.

They are now:

• Interpreters of risk in a politicised marketplace
• Navigators of reputation across polarised jurisdictions
• Stewards of credibility when trust in corporate purpose is under siege

CFOs must:

• Stress test business models against geopolitical and policy shocks
• Reassess ESG strategies through the lens of resilience and material risk
• Prepare for investor scrutiny and employee expectations in a hyper-politicised climate
• Maintain the financial discipline to speak with data, not ideology

CFOs also need to brace for several likely scenarios:

• Trade disruption. Tariffs, especially on China, could inflate input costs and disrupt supply chains.
• Tax changes. Trump has pledged to make corporate tax cuts permanent. That could impact cross-border structures, investment decisions, and transfer pricing strategies.
• Regulatory rollbacks. A Trump-led administration is likely to dial back ESG mandates, DEI expectations, and climate disclosures — potentially creating tensions for companies with global investor bases.
• Dollar volatility. Trump’s economic nationalism is creating increased dollar volatility. CFOs with USD exposure should hedge accordingly.

Final Word: The Australian CFO Imperative

This moment demands more than passive observation. It calls for a strategic reset — in financial modelling, supply chain planning, tax structures, investor communications, and governance positioning.

For Australian CFOs, this is not an abstract global event. It’s a direct risk to cross-border operations, investment flows, and stakeholder alignment. Many ASX-listed companies rely on U.S. capital markets, operate in U.S. jurisdictions, or report to institutional investors with opposing ESG expectations depending on their location.

There’s no room for ambiguity. CFOs must:

• Reassess U.S. exposure in capital and customer markets
• Recalibrate climate-related disclosures under diverging international standards
• Prepare for ESG scrutiny from both activist investors and anti-ESG narratives
• Build resilience against volatility triggered not by economics — but ideology

Most critically, CFOs must play a leadership role in preserving corporate coherence. That means resisting the temptation to flip-flop messaging to appease local audiences. Instead, they must stand behind one unified, credible strategy — globally anchored, locally executed — that serves long-term value and withstands political turbulence.

And in this fractured landscape, the CFO isn’t just the numbers person anymore. They are the translator of risk, the filter of noise, and the guardian of corporate purpose — at a time when that purpose is once again up for debate.

About the Author: Jon Brett

Jon Brett is a Non-Executive Director of Corporate Travel (CTM) and Chair of the Audit and Risk Committee. He also serves as a Non-Executive Director of Raiz Invest (RZI).

Jon is also the author of the very successful podcast series The Taking of Vocus, chronicling the extraordinary rise of Vocus, what went wrong with the M2 merger, and the eventual privatization of Vocus. The podcast is accessible via his LinkedIn profile Jon’s book The Taking of Vocus, is available on Kindle.

Connect with Jon on LinkedIn – LinkedIn Profile