By Ginika Igboke
President Donald Trump has moved to further dismantle the environmental, social, and governance (ESG) agenda by withdrawing the United States from the U.N. Framework Convention on Climate Change (UNFCCC) and dozens of other international organizations focused on climate and social justice.
The decision follows a broader retreat from ESG commitments that has also played out in the private sector, where major corporations and financial institutions have abandoned long-standing participation in global climate alliances. Together, these developments mark a significant weakening of what was once a powerful international movement supported by major governments and multinational companies.
According to the White House, Trump signed an executive order on Jan. 7 directing “all Executive Departments and Agencies to cease participating in and funding 35 non–United Nations organizations and 31 United Nations entities that operate contrary to U.S. national interests, security, economic prosperity, or sovereignty.” The following day, the Treasury Department announced that the United States would stop funding the Green Climate Fund, a major financial backer of U.N. climate initiatives.
The United States originally joined the UNFCCC in 1992 after the Senate ratified the treaty. Subsequent agreements—the 1997 Kyoto Protocol and the 2015 Paris Agreement—set emissions targets and expanded government spending to combat climate change, though neither was ratified by the U.S. Senate.
Corporate Climate Alliances Unravel
In the years following the Paris Agreement, a web of net-zero corporate alliances emerged to align private-sector activity with global climate goals. These included the Net-Zero Banking Alliance, the Net-Zero Insurance Alliance, and the Net Zero Asset Managers initiative, all operating under the umbrella of the U.N.-backed Glasgow Financial Alliance for Net Zero.
The strategy focused heavily on financial institutions, which wield significant influence as lenders and as major shareholders in publicly traded companies. Members of the Net Zero Asset Managers initiative, for example, included BlackRock, Vanguard, and State Street—the three largest asset managers in the world. Collectively, they are the largest shareholders in more than 40 percent of publicly traded U.S. firms and nearly 90 percent of companies in the S&P 500, according to a study by George Mason University researchers.
In recent years, however, these alliances have steadily lost members amid political backlash, particularly from conservative lawmakers and state officials. Critics accused participating firms of collusion, conflicts of interest, and violations of fiduciary duties, leading to boycotts and antitrust investigations in several Republican-led states.
Vanguard exited the Net Zero Asset Managers initiative in 2022, followed by BlackRock in January 2025. Shortly afterward, the initiative announced it was suspending its activities. In 2023, roughly half of the Net-Zero Insurance Alliance’s members withdrew at once, citing legal and regulatory risks.
ESG Critics Applaud the Move
Trump’s decision to withdraw from the UNFCCC aligns federal policy more closely with the retreat underway in the U.S. private sector and coincides with the administration’s efforts to expand domestic oil and gas production.
Critics of ESG policies welcomed the move, arguing that net-zero initiatives have driven up energy costs, reduced living standards, and failed to meaningfully control global temperatures.
Supporters of the withdrawal say leaving the UNFCCC removes the United States from what they describe as costly international entanglements that benefit global elites and unelected bureaucracies while doing little for ordinary citizens or those suffering from energy poverty.
Climate Advocates Push Back
Climate activists and net-zero policy supporters sharply criticized the decision, warning that it would undermine U.S. economic competitiveness and global leadership.
Environmental groups argued that stepping away from international climate cooperation could cost the United States jobs, innovation, and influence in emerging industries, while allowing rival nations to take the lead in science and technology.
Democratic lawmakers focused on environmental policy also condemned the move, saying it sends a signal that the United States is retreating from global leadership and weakening its own long-term security and prosperity.
Funding and Global Impact
Trump’s order removes the world’s largest economy—and its leading oil and gas producer—from the UNFCCC and cuts off a major source of funding. Prior to Trump’s reelection in 2024, the United States contributed roughly 22 percent of the UNFCCC’s annual budget, which stood at about 75 million euros and was set to increase in coming years.
After Trump halted U.S. payments upon returning to office in 2025, China increased its share of funding, while Bloomberg Philanthropies stepped in to cover some of the shortfall left by the United States.
The withdrawal marks one of the most consequential shifts in U.S. climate policy in decades, reshaping the country’s role in global climate governance and intensifying debate over the future of ESG initiatives worldwide.
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