Home / Business and Economy / US Demands EU Rethink Corporate Sustainability Laws
US Demands EU Rethink Corporate Sustainability Laws
20 Aug
Summary
- US urges EU to adjust corporate sustainability laws impacting business competition.
- EU's CSDDD and CSRD directives face US criticism over scope and burden.
- US threatens action if EU doesn't address concerns on trade directives.
The United States has formally requested the European Union to implement further changes to its corporate sustainability legislation. Ambassador Andrew Puzder communicated these concerns, stating that the current directives adversely impact U.S. businesses' competitiveness within the EU market. Although acknowledging some reforms in the December 2025 Sustainability Omnibus, Puzder indicated that significant U.S. reservations persist regarding these directives.
The U.S. seeks adherence to promises made in the August 2025 trade agreement, where the EU committed to reducing administrative burdens for U.S. firms under the Corporate Sustainability Due Diligence Directive (CSDDD) and ensuring the Corporate Sustainability Reporting Directive (CSRD) does not unduly restrict transatlantic trade.
Despite political agreements in December to raise compliance thresholds for CSDDD and CSRD, the U.S. highlights ongoing issues with net-zero commitments, compliance obligations, and enforcement procedures. The double materiality standards, requiring reporting on environmental and social impacts alongside financial ones, are seen as an excessive reporting burden for non-EU companies.
Specifically, the U.S. requests limiting CSDDD application to EU subsidiaries or business partners and confining it to goods/services produced or supplied within the EU. The U.S. also seeks to prevent penalties on U.S. businesses based on revenue derived from activities outside the EU, urging the EU to address these concerns to avoid unreasonable burdens on U.S. commerce.
