Takeaways

• A coalition of 16 U.S. State Attorneys General has warned major tech companies not to comply with the EU’s CSRD and CSDDD sustainability laws.
• The AGs claim that compliance would violate U.S. law and expose companies to lawsuits.
• The move is part of a broader Republican pushback against ESG and DEI policies seen as burdensome or politically motivated.

A coalition of 16 Republican State Attorneys General, led by Florida’s James Uthmeier, has sent letters to Microsoft, Google, Meta, and other major corporations urging them not to comply with the European Union’s new sustainability reporting and due diligence regulations, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

The letters, dispatched in October, warn that following these EU laws could expose U.S. companies to “lawsuits and government enforcement actions.” The coalition’s message marks the latest development in an ongoing campaign by U.S. conservatives to resist the expansion of environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) mandates, both at home and abroad.

The AGs argue that the CSRD and CSDDD would unlawfully force U.S. companies to adopt European-style ESG standards. They contend that compliance would contravene U.S. law, describing the directives as “ambiguous” and “unascertainable,” and warning that they could expose firms to legal risks such as deceptive trade practice claims and potential antitrust violations.

Read More: EU Member States Weigh Diluting CSRD and CSDDD Rules

Under the CSRD, companies must report detailed information about their environmental and social impacts, including emissions, human rights practices, and sustainability-related risks. The CSDDD goes a step further, requiring businesses to identify, prevent, and mitigate harm to people and the planet, from child labor and deforestation to pollution and biodiversity loss.

Despite an August framework agreement between the EU and the Trump administration to minimize the regulations’ effects on transatlantic trade, tensions have risen. The U.S. government reportedly warned EU member states in October of possible trade and energy supply consequences if the CSDDD isn’t repealed or revised.

In their letters, the AGs highlight several corporate initiatives, such as Microsoft’s, Google’s, and Meta’s commitments to increase spending with diverse suppliers, as examples of “misguided policies.” They urge the companies to “immediately comply with America’s laws” and to “disavow the DEI and ESG directives” tied to the CSRD and CSDDD. The coalition also requested that the companies outline what steps they have taken to reject the EU mandates.

The letters were signed by Attorneys General from Florida, Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, and Texas.

Also Read: ESG Rollback in Europe Triggers Investor Legal Strategy Shift

As the European Commission continues to negotiate potential revisions to both directives under its Omnibus initiative, this latest clash highlights growing transatlantic friction over the future of corporate sustainability and governance standards.

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Source: ESGtoday