US Urges EU to Make Further Concessions on CSRD and CSDDD

The United States has urged the European Union to make further changes to its Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), arguing that aspects of the rules continue to create undue restrictions on transatlantic trade. The move follows commitments made under the 2025 US-EU trade framework, under which the EU agreed to work towards reducing the impact of the sustainability rules on transatlantic commerce.

The US Government has formally submitted comments on the EU's CSDDD implementation guidelines, maintaining concerns about the directive's extraterritorial reach, administrative burden and potential impact on US companies. Washington has argued that requirements affecting companies outside the EU should take greater account of equivalent regulatory frameworks in their home jurisdictions.

The pressure comes after the EU's Omnibus I simplification reforms already narrowed the scope of the CSRD and CSDDD and reduced several compliance requirements. Changes included higher thresholds for companies covered by the rules, delayed implementation timelines and a more risk-based approach to due diligence. The CSDDD's harmonised EU civil-liability regime and climate-transition-plan requirement were also removed.

Despite these changes, the US Government maintains that concerns remain, particularly regarding obligations imposed on non-EU companies and the costs associated with sustainability reporting and supply-chain due diligence. US officials have indicated that Washington could consider further measures if its concerns are not addressed.

The development adds a new dimension to the ongoing debate over the EU's sustainability regulations, as trade policy and regulatory competitiveness increasingly intersect with corporate ESG requirements. While the EU has already moved to simplify its reporting and due-diligence framework, further US pressure could influence discussions around how the rules apply to international companies and how sustainability requirements interact with global trade.

The dispute highlights the growing importance of regulatory alignment for companies operating across markets. Any further changes to the CSRD and CSDDD could affect corporate sustainability reporting, supply-chain due diligence, compliance costs and the treatment of non-EU businesses, making the ongoing EU-US discussions relevant for companies preparing for evolving sustainability requirements.

US pressure on CSRD and CSDDD scope shapes how much the EU accommodates before finalising the omnibus, and it affects what non-EU multinationals should plan for on reporting infrastructure. Our ESG-strategy and sustainability-due-diligence teams help clients build reporting infrastructure robust across omnibus scenarios.