Being the CEO has never been an easy task. However, being a CEO in 2025 may well be an act of courage, especially if, in addition to being CEO, you also want to be a leader!

Operating in competitive markets has always required CEOs to pursue a very clear goal: profit. Milton Friedman brought this reality to the center of the CEO's responsibility in 1970 when he wrote that "in a free-enterprise system, a corporate executive is an employee of the owners of the business. His primary responsibility is to them" (The New York Times Magazine, 1970). In other words, the CEO is first and foremost accountable to shareholders, and it is according to this logic (of creating value for the shareholder) that he should guide his management.

This is a very clear objective that, although difficult, was uncontested and made the CEO's task understandable to everyone. For decades, the free market operated under this principle. However, things changed some years ago with the rise of so-called "stakeholder capitalism." The turning point came not only with the Business Roundtable's 2019 statement about the primacy of stakeholders, but also with the World Economic Forum's 2021. It was here that Klaus Schwab officially announced the new era of capitalism focused on creating value for all stakeholders. In fact, the climate emergency, rising inequalities, and the critical role of business in these topics (as well as the economic opportunities at stake) have already started demanding more of corporations and of their CEOs. They are now expected to create value not only for shareholders but for all stakeholders. However, this is where things start getting more complicated.

Notwithstanding, until about a year and a half ago, most companies were clearly recognizing the importance of this broader perspective. This made them realize that in the Board Room, the topic of sustainability was fundamental. The motivations for that were diverse:

• Economically, as customers, investors, regulators, and employees have all been pushing companies in this direction, making the business case for sustainability increasingly obvious.
• Reputational, as sustainability has become a "trend", and, as such, it was of value and brought more "market appetite" to work on the topic.

Ethical or moral, as companies believe that environmental and social sustainability is the right path to pursue, as well as an emerging long-term market trend. Moreover, doing the right thing also means securing a competitive advantage in future markets.

It was during these last years that we saw oil giants announcing carbon neutrality goals, energy transition strategies gaining momentum, and diversity and inclusion policies moving to the top of the corporate agenda.

In this context, sustainability was seen as a strategic asset, regardless of the cost. That is why we used to hear so much about greenwashing: companies loudly promoting environmental or social initiatives, even if this did not coincide with their real effort or impact on these issues. Greenwashing was worth it! It was an asset; it brought money and an advantage in the market.

Then 2024 arrived! A year that marked a dramatic shift. A convergence of factors brought two new terms to the fore: greenhushing and greenstalling. The business landscape was rocked by mounting pressure, growing instability, and escalating risk, driven primarily by deep political and economic uncertainty. Global cooperation agendas like the Sustainable Development Goals gave way to a logic of polarization and strategic self-interest. Companies found themselves forced to choose a side on where to stand — whatever served them the best — or remain silent, avoiding public positions to damage their reputation and bottom line.

In a shortsighted logic, some companies began to scale back or delay serious climate transitions (as seen with Volvo or Shell), because, in the short term, shareholders can benefit more from disastrous environmental policies. This retreat from ambition is what we call greenstalling. We also saw companies being intimidated in their environmental or social policies (BlackRock and Bayer), as the announcement of equality or ecological balance policies can more and more represent political or market backlash (purposefully "hiding" public sustainability information is what we call "greenhushing").

We thus see companies focusing on the logic of short-term profit, as it is difficult to manage organizations in contexts of uncertainty, in which survival is more important than ensuring success for everyone in the long term.

While this might make sense from the perspective of a 1970s-style CEO, it is a far cry from what is expected of a 2025 CEO. Today's CEOs have a clear and comprehensive understanding of the climate risk threatening the future of humanity—and, of course, the future of their business. 2025's CEO must also be acutely aware of the alarming rise in social inequality, a challenge that will only intensify throughout the 21st century.

With this in mind, the real question is not whether we have shifted from greenwashing to greenhushing or greenstalling. The question is more profound: where are the CEOs who, back in 2023, championed environmental regeneration and social justice? Are these the leaders we want and need for our companies and the global economy?

The truth is that the planet is always on the move, and the medium- and long-term trajectory is clear: sustainability is no longer optional — it is imperative.

Being a CEO in the 21st century demands social and environmental awareness, whether because this leader is driven by conscience and humanity, or because the market will increasingly require so. If you are a (potential) CEO, the choice is yours: will you lead, or will you follow? There is still a little time for you to decide.

Have a great and impactful week!

Filipa Pires de Almeida
Executive Director
Center for Responsible Business & Leadership