The global sustainability sector will carry on despite resistance from a new U.S. administration which demands a rethinking of tactics, panellists at the GLOBExCHANGE conference in Toronto said.

The policies of U.S. President Donald Trump hung over many panellists and attendees at the event for climate and sustainability professionals held from Feb. 11-13.

From the threat of tariffs on all Canadian exports to the Trump administration’s vigorous opposition to many environmental initiatives, corporate sustainability and diversity practices, it was difficult to ignore the dark shadow cast by the White House.

Already “probably the most eventful and challenging year” in his career, John McHughan, vice-president of sustainable investment at TD Asset Management, predicted the rollback of sustainability commitments from companies is only the tip of the iceberg. TD Bank, for example, left the Net Zero Banking Alliance alongside its Canadian peers and Wall Street’s biggest banks, which industry observers attribute to pressure from Trump’s re-election.

“Our strategy is not changing, but advancing the strategy and taking bold steps has become a little more difficult for fear of potential legal repercussions,” he said during a panel focused on macroeconomic drivers.

ArcTern Ventures, a Toronto-based climate tech venture capital firm, is considering technologies and innovations more palatable to the U.S. government, co-founder and managing partner Murray McCaig said during the same discussion.

Despite the air of pessimism, Julie Segal, the senior manager of climate finance at Toronto-based organization Environmental Defence, encouraged attendees to look at the world to find “consistency amid volatility”, at a session on the financial sector’s role in sustainability.

How the sustainability sector plans to continue

ArcTern’s meetings as of late have shifted from discussing clean energy sources such as nuclear and geothermal to energy efficiency. With the U.S. government spurring on private investments into artificial intelligence (AI) worth up to US$500 billion, there will be a massive demand for electricity and an opening for greening operations.

The fund is investing in an Ottawa-based photonics company developing a replacement for copper cables as a way to capitalize on the opportunity.

Management of scarce resources and climate impacts will be increasingly critical to Manulife, according to Ariel Kangasniemi, the head of environment, social and governance (ESG) for the insurance company’s general account.

The rise of data centres and AI will make electricity management more important, and for asset owners like insurers, utilities “are really core to our success,” she said. Extreme weather brought on by climate change will require Manulife to improve the resiliency of infrastructure in its portfolio.

TD is excited for the opportunities from retail investors putting their dollars in private markets to fund energy transition projects, McHughan said.

U.S. tariffs on Canadian exports would greatly hurt ArcTern’s Canadian investments and be “absolutely crushing” to companies manufacturing in Canada, McCaig said.

ArcTern is pushing the CEOs in portfolio companies to continue, but not count on subsidies, he added. That recommendation aligns with the observation by the San Francisco-based Cleantech Group, which said in its 2025 Global Cleantech 100 list the companies not relying on government funding are more likely to survive lean times.

Not overreacting to the downturn

Tip-toeing around the politics of sustainability is a challenge, Kangasniemi admitted, but not much has changed fundamentally. The leadership at Manulife is anticipating the pendulum to eventually swing back to sustainability, and its investment team which manages a general account holding over $400 billion in assets was already wary of relying heavily on government policies.

“Ultimately, our focus has been on not changing anything in terms of the fundamentals," she said. "This concept of an energy transition, you can’t really put the cat in the bag on that one.”

TD Asset Management has never been busier on the institutional side for sustainability services, McHughan said, while a shift has been seen on the retail side. The explosion of interest in ESG products from retail investors has died down, but has migrated to similar ones in thematic opportunities such as dedicated energy transition funds and biodiversity mandates.

The "drill, baby, drill" mentality promoted by Trump will collide against the wishes of fossil fuel producers that do not want to overproduce and harm their margins, Kangasniemi noted.

Segal encouraged widening one’s lens outside the U.S. to see sustainability marching onward.

Yes, the U.S. banned offshore wind farms, but there will be other open markets for renewables. Just because one government has withdrawn from sustainability does not mean the rationale vanishes elsewhere, she said.