LBS' Li highlights deeper shift behind global “climate reset” debate

London Business School’s Dr Xia Li has contributed expert analysis to a major Newsweek feature examining the emerging debate over a global “climate reset.” While political leaders, business figures and policymakers publicly clash over whether climate strategies need rethinking, Dr Li argues that the more significant transformation is happening inside organisations themselves.

Speaking to Newsweek, Dr Li notes that many companies are recalibrating their earlier net-zero commitments not because they are abandoning climate action, but because the realities of political volatility, operational constraints and accelerating physical climate risks are forcing a more honest reckoning. Some firms, she says, “were never fully committed,” and the current moment is revealing which organisations are prepared to embed climate resilience in their core operations.

Dr Li emphasises that climate impacts such as heatwaves, water stress and wildfires are now material business risks influencing supply chains, insurance costs and access to finance. As a result, investors are shifting away from traditional ESG checklists toward assessments of whether companies’ innovations meaningfully reduce emissions.

Her conclusion: this is not a retreat but a reset towards substance. The focus is moving from high-profile pledges to measurable impact, aligning societal outcomes with financial performance, and placing genuinely sustainable strategy at the centre of corporate decision-making.