What European B-School Deans Think Of Trump’s Attacks On ESG & DEI

When it comes to cornerstone business issues like sustainability, ESG, and DEI, the Atlantic Ocean has rarely loomed so large.

On one side of the pond, European businesses – and the business schools that train their future leaders – are doubling down on initiatives that confront the climate crisis, protect diversity and inclusion, and promote sustainable business practices.

On the other side, the United States just re-elected Donald Trump.

During his first term as U.S. President, Trump famously rolled back numerous environmental regulations, withdrew the U.S. from the Paris Climate Accord, and frequently criticized ESG initiatives as a form of unnecessary government overreach.

Within days of the inauguration of his second term, Trump signed at least three executive orders ending DEI programs in the federal government and withdrew from the Paris Accord for a second time. Some major U.S. brands have jumped on the bandwagon since the election, and several universities and university systems – particularly public schools in Red states that rely on federal money – have also pulled back on DEI initiatives amid Republican crackdowns.

Across the Atlantic, European business schools are not budging. Commitments to sustainability, social equity, and the environment are fundamental to long-term economic and social progress, not political whims, they say.

“The journey that many (European business schools) are on is a journey we’ve identified because of what we think are the needs of businesses and society … We will continue the journey because it’s an important journey,” Francisco Veloso, dean of INSEAD Business School in France, tells Poets&Quants.

“We’re not going to diminish it or heighten it because the administration in the U.S. has or doesn’t have a certain position.”

THE POLITICAL BACKLASH BANDWAGON

Over the last couple of weeks, Poets&Quants polled eight business school leaders from across Europe to discuss how institutions are responding to America’s shifting stance. While European business schools are largely reinforcing their dedication to responsible leadership, global collaboration, and sustainability-driven innovation, some deans are worried that the American backlash could have global repercussions.

Federico Frattini, dean of POLIMI Graduate School of Management in Italy, describes two primary reasons American companies are scaling back on ESG: opportunism and legal risks.

“Some companies (even very big ones) are stopping these initiatives to please the new President and hope for his support in aspects like helping them in disputes with the European Union on taxes, or to receive some forms of direct support,” he tells P&Q.

One stark example: BlackRock’s withdrawal from the Net Zero Asset Managers (NZAM) initiative on January 9.

“The biggest concern is that the U.S. backlash will generate bandwagon effects and consequences on a global scale, because the world is interconnected,” Frattini says.

“The loss of a significant player like Blackrock can encourage other asset managers to leave the initiative. And the bandwagon effect is not only at the business level, but I fear its effect on the political level, with more countries experiencing an increase in political acceptance of more conservatory and anti-ESG movements.”

DEI ON THE AMERICAN CHOPPING BLOCK

One of the biggest targets in the political crosshairs of Trump and his allies is DEI – Diversity, Equity, and Inclusion. Backlash momentum has been steadily growing since the U.S. Supreme Court struck down affirmative action in college admissions in June 2023, and conservatives are increasingly citing the ruling in broader DEI debate. At least 22 states have banned or rolled back DEI measures at public universities and/or government agencies, and now Trump seems to be looking for ways to entice U.S. corporations to follow suit.

Laurent Muzellec, dean of Trinity Business School in Dublin, notes that diversity is now deeply intertwined with corporate culture even as the term DEI itself has become politically divisive. However, the about-face of a few global brands – most strikingly Meta/Facebook – is alarming.

“(Meta) once strongly promoted DEI, even offering tampons in male restrooms, but has since moved toward a culture that emphasizes ‘masculine energy,’” he says. “It will be interesting to see how employees react; Meta/Facebook will likely serve as a significant case study, potentially increasing skepticism toward corporate culture initiatives.”

Muzellec predicts that many companies will seek a middle ground between fully abandoning DEI initiatives and engaging in a conservative backlash. They may quietly amend or drop the most controversial or impractical aspects of their DEI policies while continuing to treat employees fairly and without discrimination.

Sergei Guriev, dean of London Business School, emphasizes the economic imperative of DEI.
“Diversity is a business proposition,” he tells P&Q. “If you don’t want to talk to different people, if you don’t want to talk to people who look or behave differently, you are less likely to succeed in global business.”

At LBS, fostering diversity and inclusion is an integral part of its academic and research mission. It’s what they teach and what they research.

“We will continue doing that simply because we are a global business school. We have no choice here,” Guriev says.

“I cannot imagine that European business schools will move back on this. Especially those with undergraduate programs – the younger generation feels very strongly about sustainability and DEI.”

CLIMATE CHANGE AND THE GLOBAL RESPONSE

Several of the European business school deans we contacted warn against the broader economic and environmental consequences of U.S. political isolationism, particularly on issues surrounding climate and sustainability. Some fear that retreat from global climate commitments could stall sustainability progress, while others argue that it could create opportunities for European leadership in sustainable innovation.

“The U.S. policy to come out of international agreements and other actions at home will certainly slow down the global move away from fossil fuels,” said Baback Yazdani, executive dean of Nottingham Business School in England. “But it will not stop the transition to more renewable and sustainable modes of energy production and use.”

Yazdani also warns that protectionist trade policies could disrupt economic stability, stalling global economic growth and putting more upward pressure on inflation.

Muzellec tells P&Q that ESG is increasingly viewed as an economic rather than a moral imperative, with companies finding that business for good is also good for business. So, while America’s latest withdrawal from the Paris Agreement is certainly not a positive signal for the rest of the world, companies that are refocusing on the bottom line will have to take climate issues into account.

“Whether attitudes toward the planet stem from moral considerations or, more pragmatically, as a business opportunity, companies with a long-term vision are unlikely to pull back too far from ESG initiatives. Many people recognize the planet is in danger and prefer to do business with companies that respect the environment,” Muzellec tells P&Q.

Muzellec also argues that any pullbacks on these issues from the U.S. present an opportunity for European firms and institutions.

“As a European, I see a lack of U.S. investment in climate technologies and sustainable solutions as a business opportunity for companies in Ireland, Germany, France, and other European nations,” he says.

“Similarly, this presents an opportunity for European business schools, many of which have already integrated sustainability into their curricula, covering areas such as sustainable finance, green accounting, and green technology and innovation.”

COUNTERWEIGHTS TO THE U.S. ESG RETREAT

Bruno van Pottelsberghe, president and rector of Corvinus University of Budapest, Hungary, expects to see declines in ESG efforts among some American companies in the current climate, but he expects they will be short lived. There are several counterweights to consider, he says.

The first? Global markets. For American companies who want to do business overseas – particularly in Europe – external pressures will continue to encourage sustainability, ESG and DEI, regardless of domestic political shifts.

“Integrating ESG and sustainability considerations provides clear, competitive advantages and fosters stability. Companies aiming to enhance their business performance will find it necessary and rational to adopt such practices,” says van Pottelsberghe, who is also a founding member and former chairman of QTEM (Quantitative Techniques for Economics and Management) Network’s master’s program.

Second? Gen Z. Young workers – whom companies strive to attract – are much more likely to prioritize ESG principles both in their work and at their workplaces.

Finally, the rise of artificial intelligence (AI) adds another dimension to the debate, van Pottelsberghe says While AI has the potential to accelerate ESG initiatives, its rapid development also raises concerns about energy consumption, sustainability, and ethical use.

“Trump’s proposal to allocate approximately $500 billion toward AI development has notable negative implications for sustainability beyond the fact that AI can be (but not necessarily will be) used for supporting the ESG goals,” he says. “AI development and usage demand vast amounts of energy and resources (such as water), and as AI becomes more widespread, this impact will only grow.”

While AI can provide valuable insights into ESG reporting, optimize supply chains, and advance green technology, it also carries an enormous carbon footprint. Corvinus University is actively working to balance these factors, creating both a Dean for Sustainability and a Dean of AI.

“The global academic interest lies in ensuring that scientific integrity is never compromised,” Pottelsberghe says. “AI’s sustainability and social justice impacts must be carefully evaluated to minimize risks and maximize benefits.”

COLLABORATION KEY TO THE EUROPEAN B-SCHOOL RESPONSE

Karen Spens, president of BI Norwegian Business School, acknowledges that political fragmentation could complicate international cooperation. However, she remains optimistic.

“It may also present opportunities to advocate for positive change through research-based knowledge,” Spens says. “I believe that international cooperation will be more important than ever if we are to succeed in solving some of the most pressing global issues … I hope business schools can continue to be an arena for dialogue and learning in the face of increased uncertainty.”

POLIMI dean Frattini agrees.

“When the problems we face are at this scale, one single institution can have only a limited impact. Collaborations become key.”

POLIMI has launched the Repurposing Management Education initiative, which connects leading business schools across Europe to foster discussions on sustainability and critical thinking. It is also a founding school of the INNOVA Challenge (along with EDHEC Business School in France and ESMT Berlin in Germany) – a startup competition for companies leveraging technology to tackle pressing social and environmental challenges.

Trinity Business School, meanwhile, is part of the Council of Business and Society, a global alliance of leading business schools committed to fostering responsible business practices and preparing future leaders for the evolving global economy.

“Our strategy is a long-term one, focusing on sustainability and innovation, and it should not be influenced by the outcome of an election in the U.S. or elsewhere,” Muzellec says. The school also offers an MSc in Responsible Business & Sustainability, as well as MBA options that integrate sustainable solutions into their curriculum.

For Sankar Sivarajah, professor of technology management and head of Kingston Business School in London, this is a pivotal moment for business schools around the world. He hopes they will double down on embedding ESG and DEI principles into their curricula.

“By emphasizing these areas, educators can equip future business leaders with the tools to address pressing societal challenges, such as the climate emergency and social inequities,” he tells P&Q.

Kingston develops future-ready graduates through its Future Skills approach, embedded in all undergraduate courses. With the rise of artificial intelligence, climate risks, and other transformative challenges, it emphasizes the importance of skills for innovation and their critical role in driving a thriving global economy.

“In Europe, the approach to ESG and DEI focuses more on action rather than activism. Governments and businesses are being guided by robust policies and incentives that encourage sustainable practices and promote diversity,” Sivarajah says. “These measures drive systemic change and ensure alignment with broader societal goals.”

 

DON’T MISS: AMID DEI BACKLASH, NYU PROF MAKES BUSINESS CASE FOR HUMAN RIGHTS AND TRUMP EFFECT? POLL FINDS GROWING STUDY-ABROAD RELUCTANCE AMONG MBA STUDENTS