Sustainability Without the SDGs: US Policy Shifts and Corporate ESG

In March 2025, the US formally rejected the UN Sustainable Development Goals (SDGs)—a set of 17 global objectives to address economic, social, environmental challenges. The US decision marks a significant departure from previous bipartisan support for multilateral sustainability frameworks. This report examines this policy shift and its potential implications for corporate sustainability efforts and the environment, social & governance (ESG) landscape.

Key Insights

• The US withdrawal of support for the SDGs reflects a broader shift toward a sovereignty-first, transactional foreign policy, weakening global momentum for multilateral development efforts at a time when SDG progress remains off track.
• As many US companies align with the SDGs, the impact of the US federal pullback on ESG strategies may be limited. Corporate sustainability efforts are driven more by business strategy, market forces, and stakeholder expectations than by voluntary global frameworks.
• The US withdrawal from the SDGs may accelerate the fragmentation and politicization of the global sustainability landscape, underscoring the need for companies to anchor their ESG efforts in business value, legal defensibility, and region-specific regulatory realities.

The UN SDGs, adopted in 2015, establish 17 global objectives to address economic, social, and environmental challenges by 2030. [1] Building on the Millennium Development Goals, they provide a broader, integrated framework applicable to both developed and developing economies. Each SDG is supported by specific targets and measurable indicators, totaling 169 targets and 247 indicators, to track progress and accountability. As a voluntary, nonbinding initiative with engagement from governments, businesses, and civil society, the SDGs have significantly influenced global development and sustainability initiatives over the past decade.

Shifting US Policy on Multilateralism and Sustainable Development

On March 4, 2025, the US announced that it will no longer maintain its commitment to the UN SDGs, reflecting a shift in its approach to multilateral development initiatives. In a statement to the UN General Assembly, Edward Heartney, counselor for economic and social affairs at the US Mission to the UN, outlined the administration’s concerns, describing the SDGs as an expansion of “soft global governance” that, in its view, encroaches on national sovereignty. This marks a departure from previous US positions, as prior administrations supported SDG initiatives as part of broader global cooperation efforts.

Without US participation, the SDGs may face reduced political momentum, financial support, and diplomatic engagement. The US decision also comes at a time when progress toward the SDGs is already falling short. A 2024 UN report found that only 17% of SDG targets were on track to meet their 2030 goals (Figure 1), while nearly half showed minimal or moderate progress and over one-third had stalled or regressed. This lack of progress reflects several complex global challenges, including:

• Economic constraints: Global economic uncertainty (including inflationary pressures and shifting investor priorities) has curtailed financing for SDG initiatives, while unsustainable debt levels have limited the ability of many developing countries to invest in SDG-related infrastructure.
• Geopolitical challenges: Wars, civil unrest, and political instability (e.g., in Ukraine, the Middle East, and Africa) have disrupted SDG progress, a trend exacerbated by supply chain shocks stemming from the COVID-19 pandemic.
• Environmental pressures: Increasing climate-related disasters are reversing gains in poverty reduction, food security, and infrastructure resilience in vulnerable regions.
• Fragmented coordination: The SDGs require cross-sectoral collaboration but misalignment between national governments, local authorities, international organizations, and the private sector creates inefficiencies and duplication of efforts.

Changing US approach to multilateralism and sustainable development

Beyond the SDGs, the announcement reflects broader themes in the new US administration’s foreign policy priorities, including a focus on limiting UN influence, streamlining multilateral commitments, and emphasizing national sovereignty in global governance. The statement also signals a shift in US diplomatic language on development, advocating for a transition from “sustainable development” to “responsible and long-term development,” with an emphasis on economic mobility. This shift is not simply rhetorical: it signals a departure from multilateral development frameworks that emphasize environmental and social sustainability toward an approach focused on economic growth, self-reliance, and private-sector-led investment.

At a geopolitical level, the US position also reflects concerns about China’s growing influence in UN-led sustainability and human rights discussions. This extends beyond rhetoric to a broader recalibration of US engagement with multilateral institutions, emphasizing transactional, interest-driven cooperation over broad international agreements. If this trajectory continues, the new US administration is likely to prioritize bilateral and regional partnerships over multilateral commitments, seek greater influence in institutions like the World Bank and International Monetary Fund, and push for reforms that align global development financing with its strategic and economic priorities. Restructuring efforts—including downsizing of the US Agency for International Development and a reduced US role in UN agencies such as the World Health Organization—may further reshape international development assistance.

For corporate leaders in international markets, this shift suggests a policy environment where multilateral funding streams may become less predictable, US foreign aid and development finance may place greater emphasis on private-sector partnerships, and US and EU regulatory approaches to global sustainability standards may diverge further. Businesses operating in emerging markets should anticipate an evolving landscape where economic development initiatives are increasingly shaped by shifting geopolitical dynamics rather than consensus-driven global frameworks.

Implications for Corporate Sustainability and ESG Efforts

The US government’s policy shift contrasts with a tendency for many US public companies to align aspects of their sustainability efforts with the SDGs (Figures 2a and 2b). Corporate alignment has generally focused on SDGs that are most relevant to business strategy and material ESG issues. For example, PepsiCo has invested in initiatives supporting SDG 2 (Zero Hunger) through sustainable agriculture, food security, and nutrition programs.

However, in practice, the US government policy shift is unlikely to have a significant direct impact on corporate ESG strategies. While the SDGs have provided a broad, aspirational framework, their voluntary nature and expansive scope have meant they often function more as a reference point for sustainability communications rather than a central driver of business decision-making. While many firms reference the SDGs in sustainability reports and investor communications, the goals are not typically used as a primary operational or strategic framework. Several factors have contributed to this:

• Broad and abstract scope: The SDGs encompass 17 goals and 169 targets, covering a wide range of economic, social, and environmental issues. This broad mandate has made it challenging for companies to translate them into specific, measurable, and actionable business priorities. Instead, businesses have typically focused on a subset of SDGs aligned with their core operations—for example, clean energy commitments in the utilities sector or gender equality initiatives in consumer-facing industries.
• Lack of standardized metrics: Unlike financial reporting or regulated ESG disclosures, SDG commitments are voluntary, with no standardized mechanism for tracking progress or ensuring accountability. As a result, companies have adopted SDGs selectively, leading to varied and often noncomparable reporting practices across industries.
• Market-driven sustainability prevails: Ultimately, most corporate sustainability efforts are shaped by core business strategy, market conditions, stakeholder expectations, and regulatory environments rather than broad global frameworks. Industry-specific factors—such as consumer demand, investor pressure, and competitive positioning—have played a more significant role in shaping sustainability priorities than voluntary UN initiatives.

Implications of the US withdrawal for the corporate sustainability landscape

The US withdrawal from the SDGs is unlikely to significantly alter corporate ESG priorities, as most businesses already shape their sustainability strategies based on financial, operational, and regulatory considerations rather than UN-led initiatives. However, the decision reflects and may accelerate broader shifts in the legal and political landscape for corporate sustainability in the US.

Notably, the US statement to the UN as originally prepared called for “a clear and overdue course correction on gender and climate ideology, which pervade the SDGs.” This aligns with the new administration’s early moves to shift climate and energy policy—emphasizing deregulation and increased fossil fuel production while reducing support for renewable energy initiatives—and to intensify legal and political scrutiny of diversity, equity & inclusion initiatives in both the public and private sectors. As a result, the US pullback from the SDGs likely signals continued pressure on certain aspects of corporate sustainability efforts and investments.

At the same time, the US position highlights growing divergence in global sustainability regulations. While Europe continues to expand mandatory ESG disclosure requirements—such as the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive—the new US administration has deprioritized federal climate disclosure rules, favoring deregulation and corporate autonomy instead. This evolving regulatory landscape creates a more fragmented and complex environment for companies operating across multiple jurisdictions, requiring them to navigate varying and sometimes conflicting sustainability mandates.

In this shifting landscape, company leaders should ensure sustainability and ESG efforts remain anchored in:

• Business value and competitive advantage: ESG initiatives should be directly tied to financial performance, operational efficiency, and market positioning to ensure they support long-term business success rather than being perceived as peripheral commitments.
• Legal defensibility and regulatory compliance: As regulatory scrutiny increases, ESG programs must be structured to align with evolving disclosure requirements, withstand legal challenges, and mitigate potential litigation or enforcement risks.
• Regional differences in sustainability expectations: Companies must adapt their ESG strategies to reflect diverse regulatory, cultural, and political landscapes, recognizing that expectations—and even legal requirements—can vary significantly across jurisdictions.

This article is based on corporate disclosure data from The Conference Board Benchmarking platform, powered by ESGAUGE

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1 The 17 SDGs are:

1. No Poverty: Reduce extreme poverty and ensure economic opportunities for all.
2. Zero Hunger: Improve food security, nutrition, and sustainable agriculture.
3. Good Health and Well-Being: Strengthen health care systems and address major diseases.
4. Quality Education: Expand access to education and improve learning outcomes.
5. Gender Equality: Eliminate gender-based discrimination and improve opportunities for women.
6. Clean Water and Sanitation: Ensure safe water access and improved sanitation infrastructure.
7. Affordable and Clean Energy: Expand renewable energy and improve energy efficiency.
8. Decent Work and Economic Growth: Promote employment, labor rights, and inclusive growth.
9. Industry, Innovation, and Infrastructure: Strengthen infrastructure, industrialization, and technological progress.
10. Reduced Inequalities: Address disparities in income and opportunities across populations.
11. Sustainable Cities and Communities: Improve urban resilience, housing, and sustainable development.
12. Responsible Consumption and Production: Increase resource efficiency and sustainable supply chains.
13. Climate Action: Reduce emissions, strengthen resilience, and align policies with climate goals.
14. Life Below Water: Protect marine ecosystems and regulate ocean resource use.
15. Life on Land: Conserve biodiversity, forests, and land ecosystems.
16. Peace, Justice, and Strong Institutions: Strengthen governance, reduce corruption, and enhance legal frameworks.
17. Partnerships for the Goals: Mobilize financial resources, technology, and global cooperation for SDG achievement. (go back)