Across sectors, companies that ignored environmental risk, misjudged regulatory pressure, or failed to respond to social expectations have faced devastating consequences. These cases demonstrate that sustainable finance is not a matter of virtue signaling or idealism; it is about managing risk, protecting long-term value, and maintaining relevance in an evolving global economy.
PG&E (Pacific Gas & Electric) offers a sobering example of what happens when environmental risk is neglected. For years, the California utility underinvested in grid modernization and wildfire prevention. As climate change intensified drought and wind conditions, PG&E’s aging equipment sparked catastrophic wildfires. The company filed for bankruptcy in 2019, facing more than 30 billion dollars in liabilities. Investors and regulators saw this not as a natural disaster, but as a corporate failure to adapt to climate reality. PG&E’s collapse revealed how climate adaptation is now a core element of operational risk management.
Volkswagen faced a different type of crisis, one centered on deception and loss of trust. In 2015, the company admitted to installing software that allowed its diesel vehicles to cheat emissions tests. While promoting its cars as environmentally advanced, Volkswagen was releasing pollutants well above legal limits. The fallout was immediate and global. Regulatory fines, vehicle recalls, and class-action lawsuits cost the company over 30 billion dollars. More damaging still was the erosion of public and investor trust. Volkswagen’s market capitalization plummeted and the company was forced to radically overhaul its governance and sustainability strategy.
ExxonMobil provides a case where the failure was not environmental destruction but obfuscation of risk. For decades, Exxon has been accused of downplaying the effects of climate change while internally acknowledging the science. A series of lawsuits and shareholder campaigns have challenged the company’s climate disclosures and called for alignment with low-carbon transition scenarios. In 2020, Exxon was removed from the Dow Jones Industrial Average after 92 years. The removal signaled that even the most established fossil fuel firms are no longer safe from market repricing if they refuse to evolve with the world around them.
JBS, the world’s largest meat processing company, has faced ongoing scrutiny over deforestation in the Amazon. Investigations revealed that JBS sourced cattle from suppliers linked to illegal land clearing, a practice that contributes directly to biodiversity loss and climate change. Global retailers and institutional investors issued divestment threats and contract suspensions, forcing the company to implement new traceability measures. In this case, environmental risk was not abstract. It directly affected access to capital, market access, and long-term brand value.
Chevron continues to face legal and reputational damage from a long-running dispute in Ecuador. Local communities and environmental groups allege that Chevron left behind toxic contamination in the Amazon region after oil drilling operations by Texaco, which Chevron later acquired. Although Chevron disputes the allegations and the legal judgments have been contested, the case has become emblematic of environmental justice movements. It also remains a high-profile reminder of how unresolved environmental liabilities can persist across decades and continue to threaten license to operate.
Rio Tinto, one of the largest mining companies in the world, destroyed a 46,000-year-old Aboriginal heritage site in Australia’s Juukan Gorge in 2020. The destruction was legal under outdated permits, but the backlash was immediate and severe. Investors, indigenous groups, and civil society condemned the company’s failure to respect cultural rights. Senior executives resigned, including the CEO, and the company faced an erosion of stakeholder trust that triggered a reevaluation of governance structures. The incident redefined how markets view social license, indigenous consultation, and corporate accountability.
British Petroleum experienced one of the most visible environmental disasters in modern history when the Deepwater Horizon oil rig exploded in 2010. The spill released millions of barrels of oil into the Gulf of Mexico and caused 11 deaths. BP was ultimately forced to pay over 60 billion dollars in fines, cleanup costs, and litigation. Beyond the financial toll, BP became the face of environmental negligence, and the company spent years attempting to rehabilitate its public image. The disaster shifted public perception of offshore drilling and led to tighter regulatory scrutiny across the oil and gas sector.
Orpea, a European eldercare giant, was the subject of a major scandal in 2022 after investigative reports exposed systemic abuse and neglect in its care homes. Whistleblowers and journalists revealed that the company cut costs on food, staffing, and medical services to maintain margins. The scandal led to a collapse in its stock price, government investigations, and a reassessment of social performance in ESG investing. This case showed that social sustainability, including care quality and labor practices, is not peripheral to corporate performance; it is fundamental to it.
Sears, while not traditionally viewed through a sustainability lens, illustrates what happens when companies ignore structural change. Once the largest retailer in the United States, Sears failed to invest in e-commerce or digital supply chains. As consumer behavior shifted toward online platforms, Sears reduced store investment and spun off key assets rather than adapting its core business model. Eventually, it filed for bankruptcy in 2018. The underlying issue was strategic denial. Sears clung to outdated practices while the retail landscape moved on. In the same way, companies today that refuse to embrace sustainability risk repeating the same fate in a different context.
Companies that ignore environmental thresholds, social expectations, and shifts in governance standards expose themselves to material risk. Sustainability is the new baseline for relevance, resilience, and legitimacy in business.