A coalition of 16 US State Attorneys General, led by Florida’s Attorney General James Uthmeier, has issued letters to several major corporations, including Microsoft, Google, and Meta. The letters urge these companies to resist compliance with the European Union’s new sustainability reporting and due diligence regulations, known as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The Attorneys General warn that adherence to these regulations could expose the companies to lawsuits and government enforcement actions in the United States.
Dispatched to company CEOs in October, these letters represent the latest in a series of efforts by US politicians to counter the EU’s sustainability regulations, aligning with a broader Republican-led movement against Environmental, Social, and Governance (ESG) criteria. The initiative aims to prevent the imposition of additional regulatory burdens on businesses.
In a framework agreement reached in August between the European Union and the Trump administration, the EU pledged to ensure that the CSRD and CSDDD would not impose undue restrictions on transatlantic trade and would work to alleviate administrative burdens on businesses. Despite this agreement, the Trump administration threatened EU member states in October with potential trade and energy supply repercussions if the CSDDD is not repealed or significantly altered.
The CSRD establishes comprehensive reporting requirements concerning company impacts on the environment, human rights, social standards, and sustainability-related risks. Meanwhile, the CSDDD outlines company obligations to identify, assess, prevent, mitigate, address, and remedy effects on people and the planet, including issues like child labour, slavery, pollution, emissions, deforestation, and ecosystem damage. Both regulations are expected to undergo significant revisions under the European Commission’s Omnibus initiative, although negotiations on the extent of these changes are ongoing.
In their communications, the Attorneys General express a “collective concern” regarding the CSRD and CSDDD, arguing that the regulations compel American companies to follow European ESG and Diversity, Equity, and Inclusion (DEI) mandates, which they claim are unlawful in the US. They caution that the regulations’ “ambiguous and often unascertainable reporting requirements” could expose companies to various legal risks in the US, including deceptive trade practice charges and antitrust issues. Furthermore, they argue that the regulations require compliance with international accords such as the Paris Agreement, from which President Trump had previously withdrawn the United States.
The letters highlight specific ESG and DEI initiatives undertaken by the companies, such as commitments by Microsoft, Meta, and Google to increase spending with diverse suppliers. They warn that complying with the CSRD and CSDDD would represent a regression to these “misguided policies.” The Attorneys General urge the companies to “immediately comply with America’s laws and the Trump Administration’s policies” and to reject the DEI and ESG mandates imposed by the EU directives.
The letters, signed by Attorneys General from Florida, Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, and Texas, call on the companies to provide detailed responses outlining the steps they have taken to reject the directives.
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