The EU proposed the Corporate Sustainability Due Diligence Directive (CSDDD) in 2022 and formally adopted it in 2024, requiring companies to identify and address human‑rights and environmental harms across value chains. The Corporate Sustainability Reporting Directive (CSRD) came into force for large EU‑based companies in 2024, with the first reporting for large non‑EU firms operating in the EU due in 2029. Under an August 2025 US‑EU trade framework agreement, the EU pledged to prevent the two rules from unduly restricting transatlantic trade. Later, the EU passed the Omnibus package, significantly raising application thresholds and easing compliance burdens. For CSDDD, the threshold was lifted to firms with over 5,000 employees and €1.5 billion in revenue, and mandatory corporate climate transition‑plan requirements were removed. Under CSRD, the number of covered non‑EU companies dropped from around 10,000 to roughly 1,200. Still, the US government stated in its comment letter that the revisions were insufficient. It criticised the rules’ extraterritorial reach and heavy supply‑chain due‑diligence obligations, particularly the EU’s double‑materiality standard, which differs from the US’s single financial‑materiality standard. The US put forward multiple requests: narrow the rules’ scope for US businesses, ban penalties based on revenue generated outside the EU, grant the US a presumed‑compliance status, and reject the re‑introduction of mandatory net‑zero transition plans. The US Ambassador to the EU also commented that extraterritorial provisions would burden businesses on both sides of the Atlantic, with European consumers ultimately bearing the costs.
Source: https://www.esgtoday.com/u-s-to-take-any-actions-necessary-to-protect-companies-from-unreasonable-eu-sustainability-reporting-regulations/