EU–US Trade Pact Sparks Tensions Over Sustainability Rules

The recently hashed-out EU–US trade agreement includes a key commitment from the EU to ensure that its Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) do not impose “undue restrictions on transatlantic trade.” As part of this pledge, Brussels has agreed to ease administrative burdens related to due diligence requirements—especially for SMEs—and propose revisions to civil liability frameworks and climate transition mandates Critics have responded sharply. Aurore Lalucq, head of the European Parliament’s Economic and Monetary Affairs Committee, condemned the deal as a loss of sovereignty. Experts, including a Copenhagen Business School professor and ShareAction’s interim EU policy head, echoed concerns that the agreement signals a willingness to ""downscale"" sustainability regulations This move builds on broader efforts to simplify EU sustainability laws through the ongoing Omnibus package. Notably, proposals under discussion would dramatically raise thresholds for CSRD and CSDDD applicability—raising employee and turnover thresholds to 5,000 and €1.5 billion (from 1,000 and €450 million respectively)—potentially excluding around 85% of companies from CSRD coverage.