As the world grapples with economic and geopolitical uncertainty, sustainability is evolving along different trajectories across the Atlantic due to diverging political and economic priorities. In the United States, the Trump administration is reversing course, deprioritizing climate initiatives and favoring fossil fuel expansion. Meanwhile, the new European Commission, despite its stronger focus on competitiveness, continues to view sustainability as a key pillar of economic strategy. This divergence raises an important question: Is sustainability just a political trend, or is it an enduring value shaping business and society? For those of us sitting on corporate boards in Ukraine and Europe, understanding this shift is critical for making informed decisions in a rapidly evolving global landscape.

The future of DEI: To Be or Not to Be? The Answer is Clear Over the past decade, Diversity, Equity, and Inclusion (DEI) has become increasingly central to corporate governance across America and Europe. Companies recognize that diverse teams enhance innovation, decision-making, and business resilience. However, recent political shifts are significantly impacting DEI initiatives.

In the United States, the Trump administration has intensified its opposition to DEI policies. On February 27, the U.S. Department of Education launched the "End DEI" portal, allowing citizens to report diversity, equity, and inclusion programs in public schools. This move has raised concerns among educators and human rights advocates, who fear it may limit support for marginalized groups.

Corporate America is also undergoing changes. Disney recently announced adjustments to its DEI policies, removing diversity and inclusion as a formal performance metric. The decision followed new federal restrictions on DEI programs imposed by the Trump administration. Meanwhile, Citigroup has dropped its requirement for diverse candidate pools in hiring, and Goldman Sachs has relaxed its diversity-based IPO board requirements. Many America-based companies or branches of global firms in the US announced that they stop DEI programs. In Europe, gender equity remains a primary focus of DEI efforts. Women now hold over 43% of FTSE 100 board positions, surpassing EU targets. However, challenges persist, particularly in executive roles, where gender biases and inadequate parental leave policies continue to hinder progress. Additionally, the war in Ukraine has introduced new inclusion challenges, including integrating displaced professionals into European labor markets and ensuring equitable opportunities for refugees.

Looking ahead, the future of DEI in corporate governance seems to be uncertain in the US, but I expect Europe to stay firmly on this path. Even in the US, advocacy groups, institutional investors, and younger employees may continue to demand meaningful diversity commitments, ensuring that DEI keeps a certain place in corporate focus.

Despite all turbulence, we at Women on Boards Ukraine firmly believe in the value of diversity in general and for boards in particular when applied thoughtfully and grounded in professional merit. While DEI has led to significant progress, we have also witnessed flawed implementations, particularly in the U.S., resulting in backlash and reversals. This underscores the need for a strategic and balanced approach. We are certain that the current turbulence will balance the topic, and it will remain important and bring real value to organizations. As Ukraine embarks on its DEI journey in the midst of post-war reconstruction, it is crucial to learn from global experiences and adopt a sustainable, merit-based diversity strategy—one that fosters resilience, innovation, and equitable opportunities for all.

Regulatory Changes and Standards on the Move in Ukraine As part of the EU Association Agreement, Ukraine is implementing European standards, particularly in accounting and auditing. On October 18, 2024, the Cabinet of Ministers of Ukraine approved the Strategy for the Implementation of Sustainability Reporting by Enterprises—an essential step toward EU membership.

The EU has introduced mandatory sustainability reporting through Directive (EU) 2022/2464 (CSRD) and Regulation (EU) 2023/2772. These regulations require large enterprises to disclose their environmental and social impact. Ukraine is adopting the European Sustainability Reporting Standards (ESRS), aiming to:

Establish a legal framework. Enhance risk assessment for businesses and investors. Improve government access to sustainability data. Increase Ukrainian enterprises’ participation in international capital markets by 50% by 2030.

Ukraine’s adoption of EU sustainability standards is more than compliance—it’s a strategic step toward global integration. By enhancing transparency and investor confidence, businesses are positioning themselves for growth in international markets.

******Environmental Risks and the Financial Sector: Navigating Uncertainty in a Changing Landscape ******

Banks carefully analyze the environmental responsibility of companies across various sectors, from manufacturing to retail. This includes assessing their environmental impact, energy efficiency, and waste management practices.

Ukraine has an environmental security strategy in place until 2030. However, the lack of specific regulations creates challenges for banks. Without legislative norms that define risks and impose sanctions for non-compliance, financial institutions are forced to develop their own approaches to assessing climate risks.

Banks identify four main groups of risks. Political and legal risks include CO2 emission taxes, reporting requirements, and potential fines. Technological risks stem from investments in new green technologies, which may quickly become obsolete due to regulatory changes. Market risks are related to demand for environmentally friendly products, while reputational risks arise from potential losses due to negative public perception of a company.

Environmental risk management must be embedded at the strategic level—within Supervisory Boards. However, there is currently an imbalance: managers possess practical knowledge but lack strategic vision, while Supervisory Board members often lack specialized knowledge of climate risks. As a result, 85% of independent directors globally acknowledge the need to enhance their expertise in ESG matters.

Ukrainian companies are gradually aligning with international standards. Many are integrating sustainability principles, especially those that attract funding from major banks or operate in global markets. The existing experience and potential allow Ukraine to more actively implement effective climate risk management strategies.

Harnessing Technology and Innovation for Sustainability

In my extensive experience as a management consultant, I have witnessed firsthand the transformative power of technology in driving sustainability.

The rise of Artificial Intelligence and Machine Learning is revolutionizing resource management, allowing organizations to optimize operations and significantly reduce waste. However, it is essential that we adhere to Responsible AI principles, ensuring that our deployment of these technologies is grounded in ethical governance, transparency, and accountability.

Advancements in renewable energy technologies, such as solar and wind, are paving the way for a low-carbon economy. I am particularly excited about the momentum behind the circular economy, which promotes innovative solutions for recycling and resource sharing. Precision agriculture technologies also stand out to me, as they enhance crop yields while conserving vital resources, showcasing the potential of technology to address pressing global challenges.

Moreover, carbon capture and storage technologies are crucial in our fight against climate change, and sustainable transportation solutions, including electric vehicles and shared mobility, are reshaping urban landscapes. The role of blockchain in enhancing supply chain transparency cannot be overlooked, as it ensures ethical sourcing and accountability.

In my opinion, board members have a pivotal role to play in championing these innovations. It is the Board’s responsibility to foster a culture of sustainability that aligns with ESG principles and to establish frameworks that govern the ethical use of AI. By prioritizing Responsible AI and embracing these trends, Boards can drive meaningful change and position organizations as leaders in the quest for a sustainable future.

Sustainability at a Crossroads: Why the US and EU Are Taking Diverging Paths

As the world grapples with economic and geopolitical uncertainty, sustainability is taking different paths across the Atlantic. In the United States, the Trump administration is reversing course, deprioritizing climate initiatives and favoring fossil fuel expansion. Meanwhile, the new European Commission, despite its stronger focus on competitiveness, continues to view sustainability as a key pillar of economic strategy.

This divergence raises an important question: Is sustainability just a political trend, or is it an enduring value shaping business and society? For those of us sitting on corporate boards in Ukraine and Europe, understanding this shift is critical for making informed decisions in a rapidly evolving global landscape.

The US Retreat from Sustainability

Under President Trump’s renewed leadership, the US is shifting away from the sustainability, diversity and overall ESG-driven policies that gained momentum in recent years. Key actions include the withdrawal from the Paris Agreement, the declaration of a national energy emergency to accelerate fossil fuel projects, a ban on subsidies for solar and wind, and the rollback of environmental justice initiatives such as Justice40, not to mention the current freeze on the grants via federal agencies and USAID. The administration’s focus is clear: strengthening the US trade position, prioritizing economic development, traditional energy sources, and short-term economic gains over long-term environmental and social considerations.

Europe’s Commitment to Sustainability

In contrast, the European Commission continues integrating sustainability into its economic model. The recently announced Clean Industrial Deal commits €100 billion to clean manufacturing and energy efficiency. At the same time, efforts to simplify sustainability reporting rules aim to reduce administrative burdens for businesses. Despite a stronger focus on economic viability, the EU remains committed to legally binding climate neutrality targets for 2050.

Unlike the US, Europe lacks domestic fossil fuel reserves, making renewable energy a necessity rather than a choice of pure politics. Moreover, sustainability is not just a regulatory requirement but a reflection of European values—ensuring clean air, responsible business practices, and fair labor conditions.

The Fundamental Divide: Energy Resources vs. Societal Values

The key difference between the US and Europe is how they define competitiveness. The US leverages its domestic oil and gas resources to drive short-term economic growth, while Europe views sustainability as essential for long-term resilience. European policies reflect societal expectations—whether from voters, businesses, or investors—who see ESG as a core part of economic stability and energy security.

Ukraine, positioned between these two economic powers, must navigate this divergence carefully. The US and the EU remain crucial partners, but their differing approaches to sustainability create a complex decision-making landscape. In some cases, adhering to sustainability means our ability to get funding from the EU. Still, it has also been proven as a new way to secure the supply of energy, which could be restored quickly. The public initially scrutinized U.S. interest in Ukraine’s mineral deal with criticism, but the final version offered some hope for more FDI coming to Ukraine. That is important for the S and G points of ESG.

Advice for Board Members: Balancing Transatlantic Priorities

For corporate leaders in Ukraine and the EU, the shifting transatlantic stance on sustainability presents risks and opportunities. While ESG may seem politically less relevant in the US, sustainability remains a long-term societal value. People everywhere—whether in Ukraine, France, Belgium, or the US—want clean air, fair labor conditions, and a healthy environment.

Political cycles change, but these fundamental expectations persist. As a post-war economy, Ukraine will naturally prioritize economic recovery, but that does not mean abandoning sustainability. When sustainable choices also enhance competitiveness—such as investing in renewables or responsible business practices—they must be pursued. Businesses' long-term resilience depends on integrating economic and sustainability considerations, regardless of shifting political priorities.

The current transatlantic divide on sustainability should not be seen as a reason to abandon it but as a reminder that economic, environmental, social, and governance interests are deeply connected. Europe views sustainability as a strategic advantage, while the US focuses on short-term economic priorities. For Ukraine, the best course of action is to remain flexible—prioritizing growth while recognizing that sustainability is not just a policy trend but an enduring value that shapes societies and economies.

Conclusion: A New Agenda – Balancing Economic Interests and Long-Term Value

Global trends in DEI and sustainable development are no longer a matter of choice—they have become a battleground for strategic conflicts between short-term economic priorities and long-term societal resilience.

In the U.S., corporate governance is increasingly shifting back towards an "efficiency economy" model, while Europe continues to integrate ESG principles, ensuring sustainability through responsible resource consumption and inclusive business practices. Ukraine, positioned between these two models, faces a critical choice that will determine not only investment flows but also the long-term competitiveness of its companies.