Corporate environmental, social, and governance (ESG) initiatives have been the target of increased public and political scrutiny over the past few years, but efforts have intensified during the second Trump administration. Approximately 80% of companies are adjusting their ESG policies to mitigate legal and political risk, according to a new report from the Conference Board, which surveyed 125 senior sustainability and ESG executives at leading U.S. and multinational companies. 

“There have been a lot of very sudden policy swings,” Andrew Jones, principal researcher at the Conference Board’s Governance & Sustainability Center and author of the report, tells Fortune. “Our member companies are grappling with ‘How do we best navigate this environment?’”  

But while the majority of companies are tweaking their ESG policies, only 6% report making significant changes. Instead, most are implementing minor (45%) or moderate (29%) adjustments, according to the report. Boards and senior leaders are prioritizing policy defensibility, return on investment (ROI), and alignment with enterprise value, as opposed to broad expansion of initiatives or a values-led framing, says Jones. 

“We’ve seen this both in DEI and in ESG—a much closer legal review, much closer kind of compliance mindset,” Jones said. 

Since taking office, President Trump has scaled back Environmental Protection Agency (EPA) oversight and eliminated a Biden-era rule that companies must disclose climate-related risks and greenhouse gas emissions. He also signed an executive order specifically targeting states with ESG policies, titled “Protecting American Energy from State Overreach.”

But while federal regulation of corporate climate action may be waning, certain states are doubling down, leading to a patchwork approach. That might be why the increasing fragmentation of ESG regulation is a top concern for ESG leaders. Approximately half of that cohort is worried about how the widening gap between federal, state, and international policy will complicate compliance and alignment. 

“When you talk about states like California and New York, pretty much every company does business there. So [their policies] become de facto federal rules,” Jones says. “Then, at the same time, all these multinational [companies] are subject to new rules coming out of Europe. Right now, the picture is just really uncertain.”