THE WASHINGTON POST: US revives pressure on Europe to relax corporate ESG rules

America’s ambassador to the European Union said Brussels needs to relax corporate rules designed to protect the environment and human rights, linking the US’s demands to a trade agreement struck last year.

In a post on X, Andrew Puzder said “it’s time for the EU to deliver” on what he described as the bloc’s pledge to ensure American companies won’t face “undue restrictions” on trade.

The comments threaten to revive a standoff between the US and the EU over the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.

The frameworks have been watered down after pushback both from within and outside the EU. But they’re still intended apply to companies that do business in the EU, no matter where they’re based.

CSDDD and CSRD require that companies report the financial environmental, social and governance risks they may face, and that they also disclose and remediate their environmental and social impact.

In an accompanying letter to Puzder’s post on X, the US government noted that the EU had made “some positive reforms,” but said those “failed to fully address US concerns.”

As a result of the directives’ extraterritorial reach and costs, US businesses won’t be able to compete in Europe on a level playing field, according to the letter.

A spokesperson for the European Commission didn’t immediately respond to a request for comment.

The EU is currently drawing up guidelines for complying with the due diligence directive.

The US also warned the bloc against using guidelines as an opportunity to reintroduce climate transition plan requirements.

--With assistance from Yurii Stasiuk and Max Ramsay.

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