While the markets bounce wildly with each new tariff announcement from President Donald Trump, it’s probably good that you can’t invest in the fortitude of U.S. business leadership. If there were futures on spines, they would be down.
Societal, democratic, and economic norms are being severely tested by the edicts that have poured out of the White House since January. Anything that falls under the general category of sustainability — climate action, human rights, ESG (environmental, social, and governance), and of course DEI (diversity, equity, and inclusion) — is in a bear market in the U.S., given Trump’s demands that companies walk back their efforts. A handful of high-profile companies have explicitly backtracked on previous sustainability commitments in the wake of the new administration’s hostility and some — most notably some big law firms — have fully capitulated. But the vast majority have just gone silent.
It’s logical, in a way. If you’re responsible for the brand and financial performance of a large company or institution, the incentives are to avoid conflict. Seeing the vast power of the U.S. federal government explicitly targeting organizations for what was normal business just months ago is stressful and, well, scary. It’s no surprise that organizations want to avoid the limelight of coming under direct fire from Washington and putting many millions of dollars of government business or grants at risk.
But this is a time for courage. This is a time for business leaders to face head-on the risks and fears that having courage involves, and find the sense of purpose to stand up for what they’ve long said is right.
A New Climate of Fear
High-profile cases of new legal and financial pressures being put on organizations are well known. In March, Columbia University gave in to a number of demands from the U.S. government — including narrowing where and how protest activities can take place, assigning a new provost to review the school’s Middle East programs, and adopting “a position of institutional neutrality.” The university was, in part, trying to protect federal funding that the president threatened to withdraw, but it was a shocking capitulation. In parallel, a growing number of major law firms such as Paul, Weiss have come under serious pressure to abandon their diversity efforts and provide pro bono work for Trump’s administration. The total value of free work pledged appears to now be over a billion dollars. The line between normal business and political payoff is blurring fast.
Each individual organization may be making the decisions it thinks are good for it. But is flight from a fight good for the world? Not so much. Or even good for the company? We need to have a much richer discussion about that.
Companies are worried about the risk to their bottom lines if they go against anti-sustainability sentiment in the media or government. Fair enough. But from the outside, it looks like they’re assessing only one side of the equation. There seems to be a systematic undervaluation of the cost of giving in. What message does it send to customers, employees, and long-standing partners when you abandon your stated values?
Conversely, how deeply can you connect to stakeholders when you stand for something? The CEO of Marriott, Anthony Capuano, recently defended diversity, saying, “we welcome all to our hotels and create opportunity for all.” Within 24 hours, he got 40,000 thank you emails from employees. How much business value and employee loyalty was created in that one moment of courage?
Marriott stuck to its values. If only retailer Target had done the same. A fact sheet on the retailer’s website prominently highlights its “commitment to inclusion.” But in January, the company said it was scaling back its DEI efforts, including halting programs designed to help Black employees with their careers and to promote Black-owned businesses. This follows the company dropping LGBTQ+ merchandise in 2023 and 2024 after social media pressure (and legitimate fears of violence against its employees). Fortune reported the company’s recent retreat from DEI has created huge reputational risks and spurred a national boycott by civil rights activists.
Both Target and Paul, Weiss had a long history of engagement and commitment to equity. For some stakeholders, that makes the pullbacks sting even more.
Why Standing Strong Matters
A quick important note: This retreat from diversity doesn’t just raise a moral question — it’s also bad for business. The business value of diversity is borne out by research. Studies show, for example, that while some diverse teams might take longer to make a decision (when there’s less groupthink), they provide better results.
On a larger level, the demographics don’t lie; the world is, in fact, getting more diverse. The under-25 crowd in the United States is no longer majority White. Companies that alienate diverse communities will struggle to connect with key stakeholders. As a colleague, a top economist, said to me, “I don’t really get these companies pulling back on DEI. Don’t they want to be able to attract employees?”
I believe there is a good business case to avoid “giving in,” but there’s a larger societal case. Companies do not exist in a vacuum, and when governments undermine basic freedoms or ignore court rulings, the whole societal and economic system can become unstable. Even though there’s intense attention on tariffs right now, what should really worry business leaders are the other abuses of power — the ones going far beyond the pushback against sustainability and DEI. For example, picking up a legal resident of the U.S. (by mistake no less) and sending him to a foreign prison — without a lawyer or judge being involved at all — is beyond antidemocratic. Why would companies think that this overreach won’t touch the private sector?
Whether on an economic or societal level, capitulation is bad strategy. Appeasement doesn’t work. Companies and universities can’t just hold their collective breath, hoping the shadow of death will pass by their house. Laying low doesn’t stop the demands — it invites more of them.
A Call to Action for Business Leaders
So, what’s the answer? To put it simply, courage.
Precious few leaders have stepped up and rejected the government’s demands. Harvard University’s president, Alan Garber, is the big exception after issuing a letter responding to the Trump administration in mid-April with a clear statement: “The university will not surrender its independence or relinquish its constitutional rights.” This stand has cost Harvard more than $2 billion in federal money — so far. I’m hard-pressed to think of organizations, especially businesses, that have voluntarily given up significant money for principle. The lone top-of-mind story was the 2014 decision by the pharmacy chain CVS to stop selling cigarettes, foregoing its own $2 billion a year in revenue.
These exceptions don’t disprove the rule. This kind of leadership is rare. But we can create more of it if we band together in collective courage.
Easier said than done, but some hopeful signs are showing in this realm. Garber’s courage at Harvard sparked a public statement from hundreds of colleges and universities, declaring that they “speak with one voice against the unprecedented government overreach and political interference now endangering American higher education.” A group of deans of law schools issued a public statement “reaffirm[ing] basic principles: The government should not punish lawyers and law firms for the clients they represent … [this] violates the First Amendment and undermines the Sixth Amendment.” And three partners from Keker, Van Nest & Peters wrote in The New York Times about the direct attacks on law firms that had represented the president’s opponents. They called for other firms to each submit their own friend of the court brief, saying, “If lawyers and law firms won’t stand up for the rule of law, who will?”
Indeed. It’s about coming together. Note that the op-ed is written by three people, not one. That’s strategic — there’s safety in numbers.
We have been here before, and in the past, companies have acted together to fight overreach or abdication of government responsibility. Nearly a decade ago, when the state of North Carolina passed a bill rescinding protections for LGBT (the acronym of the time) people, more than 80 prominent CEOs wrote an open letter condemning it. When Trump took the U.S. out of the global climate Paris Accord during his first administration, a large coalition of CEOs, governors, and mayors created the “We Are Still In” movement, vowing to maintain their climate change efforts.
Eight years later, the corporate coalition and its statement still exist — it now goes by “America Is All In” — but something is clearly different. Keep in mind that former President Joe Biden brought the U.S. back into the Paris Agreement on his first day in office, and Trump withdrew the U.S. again, also on his first day in office. When media company Trellis Group recently contacted 30 core companies behind the initial movement, a few said they were still committed. But the rest declined to comment or didn’t respond at all.
I asked one of the founders of We Are Still In, Paul Polman, former CEO of Unilever (and subsequently my coauthor of the book Net Positive), what he thinks is going on. He said that with the original statement, “the target was simply the Paris Agreement — it was a bad policy move to exit it. The broader context was not as toxic. Now, a public effort will be seen as an overt direct attack, not just on the problem of climate change, but on a broader government position … and we know the reaction that evokes.” More positively, Polman noted that in the few months since the president pulled the U.S. out of the agreement, there have been few signs of key states or cities rolling back their climate efforts.
But Polman’s comment brings us to the real point here. If leaders act only when the context is not toxic, they’re not taking much of a leap. Courage in the face of hostility is much harder.
The Elements of Courage
Research shows that courage generally involves three things: risk, fear (not its absence), and purpose.
The risk element in courage is critical. Who said progress or holding on to values is painless? Former President Barack Obama recently spoke at Hamilton College and made the simple point that Americans might need to “possibly sacrifice” to support democratic ideals. “It has been easy during most of our lifetimes to say … you are for social justice, or say you are for free speech, and not have to pay a price for it,” he said. The Americans he’s talking about are not just the people taking to the streets; they’re also sitting in boardrooms.
The fear part of courage is obviously an issue. It’s scary to take on the government, and the fear of personal retribution, violence, or economic loss is legitimate (even U.S. Senators are scared). But the fact that it’s scary and hard is precisely the point. Those three lawyers who called on law firms to stand up wrote, “Our decision to speak out on this issue was an easy one.” I appreciate the moral sentiment, but that’s undoubtedly not true. Staying quiet would’ve been much easier, but they chose the harder road.
The third element of courage, purpose, is powerful and can provide an important focus. Former President John F. Kennedy Jr., who wrote Profiles in Courage, once famously spoke about the outrageous goal of putting a person on the moon. We do these things, he said, “not because they are easy, but because they are hard … because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win.” Focus on that point: Be unwilling to postpone when your values and purpose are at stake.
Think about some big, pressing missions today: defending democracy; protecting those who are powerless in the system; proactively including those who have been traditionally excluded (not only because of race or gender but because of differing abilities, too); ensuring our planet can still support us. These are powerful forms of purpose.
The practice of courage comes down to a question leaders face all the time: When should we use certain scarce capital? We focus so much on financial capital, but I argue that now’s the time to also use moral capital. And that means getting off the sidelines. Wesleyan University’s president, Michael Roth, recently put it this way: “The infatuation with institutional neutrality is just making cowardice into a policy.” (Interesting thought exercise: When you use moral capital, does it regenerate and create more?)
So I ask, is this the time to go all in? Consider the Fred and Barbara Erb Family Foundation, which has been funding projects to help nature for years (and, disclosure, founded University of Michigan’s Erb Institute, where I recently joined the unpaid advisory group). The foundation decided that biodiversity and climate change could be struggles lost in a generation, so it is paying out all of its funds by 2034. It’s front-loading the spending to battle today, when it matters. [Note: after I published this Bill Gates announced a similar move, planning to spend down $200 billion over 20 years].
Well, the independence of business, academia, and nongovernmental organizations — as well as the stability of U.S. democracy and the largest economy in the world — is a pressing problem. And the time to act to protect it is most certainly now. It can seem prudent for a single organization to lay low and “live to fight another day.” But what if the fights that really matter are not later but right now, and only right now? What if there is no other day?
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