A group of 16 U.S. State Attorneys General*, led by Florida AG James Uthmeier have sent letters to the leaders of several companies, including tech giants Microsoft, Google and Meta, urging the companies to not comply with the EU’s new sustainability reporting and due diligence regulations, the CSRD and CSDDD, and warning that the laws would expose the companies to “lawsuits and government enforcement actions” in the U.S.
The letters, sent to the company CEOs in October, form the latest in a series of moves by U.S. politicians to push back against the EU’s key sustainability regulations as part of a broader anti-ESG movement by Republican politicians, and to avoid introducing new regulatory burdens on companies.
In a framework agreement reached between the European Union and the Trump administration in August, the EU committed to take steps to ensure that the CSRD and CSDDD “do not pose undue restrictions on transatlantic trade,” and to reduce administrative burdens on businesses from the regulation. Despite the agreement, the Trump administration threatened EU member states in October with trade and energy supply consequences if the CSDDD is not repealed or watered down.
The EU’s Corporate Sustainability Reporting Directive (CSRD), based on new underlying European Sustainability Reporting Standards (ESRS), introduces detailed reporting requirements on company impacts on the environment, human rights and social standards and sustainability-related risk. The Corporate Sustainability Due Diligence Directive (CSDDD) sets out obligations for companies to identify, assess, prevent, mitigate, address and remedy impacts on people and planet – ranging from child labor and slavery to pollution and emissions, deforestation and damage to ecosystems. Both regulations are likely to be significantly cut back as part of the European Commission’s Omnibus initiative, although lawmakers are continuing negotiations on the scope of the changes.
In the letters to the CEOs, the AGs express “collective concern” about the CSRD and CSDDD, claiming that the regulations “ask American companies like yours to follow European ESG and DEI mandates,” and stating that “compliance is unlawful in the United States.”
The AGs warn the companies that the regulations’ “ambiguous and often unascertainable reporting requirements” will expose the companies to numerous legal risks in the U.S., including deceptive trade practice actions, in addition to antitrust issues, while adding that the regulations “seek to require companies to comply with the Paris Agreement and similar accords, notwithstanding the fact that President Trump has removed the United States from these agreements.”
The letters individually point out various ESG and DEI initiatives “unfortunately” undertaken by each of the companies, such as Microsoft’s, Meta’s and Google’s goals to increase spend with diverse suppliers, and warn that “bowing to the unlawful CSRD and CSDDD demands would be a return… to these misguided policies and a step in the wrong direction.”
The letters urge the companies “to immediately comply with America’s laws and the Trump Administration’s policies and disavow the DEI and ESG directives imposed by the CSRD and CSDDD,” and calls on the companies to respond with detailed steps they have taken to reject the directives.
*The letters were signed by AGs from Florida, Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, and Texas.
