Fewer Companies Made Sustainability Commitments at Davos. Maybe That's a Good Thing.

Nearly 3,000 business executives, politicians, NGO leaders and academics descended on Davos, Switzerland, at the end of last month for the annual meeting of the World Economic Forum. But something felt different this year.

"We started the week with the inauguration," Noa Gafni, managing director at the nonprofit consulting firm FSG, told TriplePundit after returning from Davos. "Everybody was looking to see what would be coming out of the U.S. Even though it's a global conference, the new administration was very much in everybody's minds."

The murmur of the unknown as news of tariffs and funding freezes spread across the halls in Davos wasn't the only thing off about the annual meeting. Ever since the World Economic Forum updated its Davos Manifesto calling for a “better kind of capitalism” ahead of the annual meeting in January 2020, the event served as a key launching pad for big corporate statements and lofty commitments tied to environmental sustainability and social equity. But corporate leaders were largely silent on that front this year. 

"Absence was telling," said Gafni, who also serves on the faculty at Columbia University’s Climate School. "There were far fewer statements made than there usually are in terms of corporate commitments." 

That may sound like another sign that businesses are stepping back from their social and environmental efforts, but some say fewer headline-grabbing pledges at Davos may actually be a good thing. 

"I think folks are taking the opportunity to go beyond the commitment," said John Harper, CEO of FSG. "It's one thing to say, 'We're doing this and it's the right thing to do.' It's a different thing to say, 'We're doing this, it's tied to our business value, we expect these metrics, here's what it's going to do for the world, here's what it should do for our business, and we will stop doing it at the end of that.' If there is a silver lining in the midst of what can feel like chaos, I'm hopeful that more folks are going to move to that level of specificity to actually start operationalizing these ideas — as opposed to what in many ways were standalone commitments, disconnected from business, coming from organizations unclear of how they would measure any progress." 

A new day in Davos

Onlookers often deride the Davos meetings as little more than a ski trip for the super rich but, at least idealistically speaking, they're meant to be much more. German engineer Klaus Schwab founded the World Economic Forum in 1971 as a nonprofit foundation focused on "promoting stakeholder responsibility, the concept that companies, in addition to generating economic prosperity, have a responsibility toward society and nature," according to the organization. 

In 2020, the World Economic Forum went a step further by updating the Davos Manifesto, the first of which was published in the 1970s. "The purpose of a company is to engage all its stakeholders in shared and sustained value creation," the revised manifesto reads. "In creating such value, a company serves not only its shareholders, but all its stakeholders — employees, customers, suppliers, local communities and society at large." 

The stance challenged the longstanding business doctrine of shareholder primacy and economist Milton Friedman’s famous proclamation that the only “social responsibility of business is to increase profits.” It ushered in a new era of corporate purpose and activism, with companies making bold pledges to far-away targets like reaching net-zero emissions, ending systemic racism and eradicating poverty. While laudable, the majority of these commitments lacked the fundamentals that would allow them to endure — namely things like short-term action steps and clear success metrics — and as such many fell by the wayside as budgets shrunk or political winds shifted. 

"Beyond stakeholder capitalism, it needs to be specific, it needs to be measurable, it needs to be actionable, and it needs to have an end date," Gafni said of what it takes to make corporate environmental and social programming successful. "It's not just a commitment that is amorphous, it needs to be something that is really tangible." 

What it takes to "make the business case for sustainability" in 2025

"Making the business case for sustainability" was a common phrase in the early aughts as professionals were pushed to prove that devoting resources to environmental and social programming could benefit the bottom line. With a growing body of research linking values-aligned leadership with stronger financial performance, many in the space thought they were done making the case for their work.

But with renewed scrutiny under the Donald Trump administration, and critics questioning whether businesses should engage in environmental or workplace equity efforts at all, leaders are challenged once again to clearly demonstrate why their work matters and how it helps communities, preserves the environment and drives core business outcomes. 

Much as the winds shifted away from broad corporate proclamations in Davos, the latest iteration of making the business case is unlikely to look like the last. 

Someone recently told Harper, "I've never won an argument when I brought in the McKinsey research and said, 'Here's the business case,'" and he couldn't agree more. "It's more about what is your business case?" he said. "Oftentimes folks have been resting in these broad generics that are not tied to their business practices — in many instances are not even tied to their industries — and yet expecting their senior leaders or their shareholders to make that leap. That's sloppy business. I'm excited to bring the rigor back into the conversation."

It's no longer enough to pull out a study that links efforts like diversity, equity and inclusion (DEI) initiatives to better employee retention rates or higher profits across a broad spectrum of businesses that may not be related to your own, he argued. For their work to stand the test of time and become part of the everyday course of doing business, leaders need to get specific about what they're trying to do, the evidence that tells them it will be effective, and the outcomes they see along the way. 

"I don't know that communities were actually asking for big commitments and these sort of blanket checks. Folks wanted different experiences. Folks wanted improved outcomes. Folks wanted reduced barriers," Harper said. "If we can get more explicitly to: What does DEI mean? Is that actually going to change my experience? You can see in the measures the number of folks who say, 'Of course we want inclusive workplaces where all folks feel belonging.' But how many folks don't realize that's what DEI is actually working toward? There's this disconnect because we've lost the specificity." 

Without clear parameters or metrics for success, it's easy for social and environmental programs to feel like marketing fluff, and for critics to dismiss them as a naive waste of shareholder money. 

"We have a lot of commitments and no updates a year later, but I'm not sure that getting in a fight over the updates is actually that productive," Harper said. "We want to understand at the outset, with the company saying: 'We're looking for these types of principles, we've seen these types of impacts in our business, and we're excited to move forward.' That feels like a much more inspiring and helpful story." 

Breaking corporate social responsibility (CSR) or environmental, social and governance (ESG) programming out of silos was also discussed a lot in the early years of the corporate sustainability movement, but many companies never really got there. Now, they're paying the price as they're targeted with criticism over programs that were built more as appendages than as essential components of the company's future success.

"This is not the remit of your CSR team. This is not the remit of your DEI team. When it becomes that, we have failed," Harper said. "The problem is we sort of segment it out. ESG is this separate thing that somehow wouldn't be understood by the same measures. There's an opportunity to bring some of that connection back. I think that is achieved when we have more coalition-building and community between heads of DEI, ESG, et cetera and their business unit counterparts. It's in those relationships and that engagement that we actually get to the things that make sense for the business."

The bottom line  

The temperature among corporate leaders at Davos was a mixed bag. "It ran the gamut from we're going to continue with our commitments, but we're not going to talk about it, to we're going to double down in our commitments, to we're going to pull back," Gafni said. "There was such a range that I think it was hard to achieve consensus, at least from the individuals I spoke with, and I spoke with many across different sectors." 

Even as scrutiny and government action breeds uncertainty, Gafni left Davos feeling optimistic about the future. "It's a time of challenge, but I think there will be many opportunities," she said. "Something new will result from this, and I think that something new will be much more constructive, much more pragmatic, and will lead to a new wave of corporate social innovation."

Harper agreed. "Constraint breeds innovation. We know that we have some new constraints. So, what is the innovation on the horizon?" he said. "It feels like it's moving from the compliance and commitment space to meaningful implementation. If we can open up the brain space for that, it's an exciting proposition." 

Editor's Note: An earlier version of this story implied FSG CEO John Harper attended the World Economic Forum annual meeting this year. Noa Gafni attended the meeting, and Mr. Harper shared his insights on the current state of corporate responsibility more broadly to inform this story. We made an update on February 5, 2025, to better reflect this.