EU Pressures U.S. Companies to Embrace New Regulatory Changes

pile of passports with European Union on top

The European Union has passed legislation that could force U.S. companies to adopt what many consider “woke” regulations.

At a Glance

The European Union has finalized the Corporate Sustainability Due Diligence Directive (CSDDD).
The law applies to both EU-based and non-EU companies providing products and services in the EU.
Major U.S. corporations like Amazon, Apple, Google, Ford, Cargill, and McDonald’s must comply by 2027.
Non-compliance could result in fines up to 5% of a company’s net worldwide turnover and potential lawsuits.
The CSDDD will necessitate significant adjustments in compliance measures for U.S. companies.

CSDDD Explained

The European Union has implemented the Corporate Sustainability Due Diligence Directive (CSDDD), designed to enforce modern, progressive regulations. U.S. companies operating within EU jurisdiction must now adhere to these progressive rules, aligning with European values centered on workplace diversity, environmental sustainability, and social responsibility.

The CSDDD covers both EU-based businesses with over 1,000 employees and non-EU companies if they earn over $489 million in the EU. Requirements span from reducing biodiversity loss and limiting water and land consumption to prohibiting disinformation and guaranteeing labor union rights. Companies must also adopt climate transition plans and adhere to U.N. resolutions, EU regulations, and international agreements.

Lol, the "woke" #CSDDD has reached Fox News:

"The European Union has no right to transform U.S. businesses and American culture. It has no right to tell Americans which labor rules it must comply with…"

That is *precisely* the right the EU has.https://t.co/0B7OsMPicj

— Mathieu Vervynckt (@MVervynckt) June 12, 2024

Impact on U.S. Companies

Major U.S. corporations including Amazon, Apple, Google, Ford, Cargill, and McDonald’s will need to adjust their business models to comply with the new legal framework by 2027. These changes will significantly impact business operations and supply chains, reaching global dimensions.

“This groundbreaking law is a major victory for rights groups, trade unions, and civil society networks at the forefront of the fight for corporate accountability. Despite fierce opposition from powerful corporate lobbyists seeking to thwart or indefinitely postpone this law, this directive is a testament to the strength and perseverance of those advocating for justice and accountability in the corporate sector,” said Tirana Hassan executive director at Human Rights Watch.

Non-compliance could result in substantial financial penalties and exposure to lawsuits from individuals or activist groups. The CSDDD mandates companies to assess and mitigate human rights and environmental risks in their supply chains, extending its influence even to operations outside Europe. Additionally, EU member states will incorporate this directive into their national laws over the next two years.

Broader Implications

The EU aims to hold corporations accountable for human rights and environmental abuses in their supply chains. This legislative shift represents a move from voluntary corporate responsibility to enforceable obligations. The CSDDD could impact nearly every medium and large-sized business in America. This legislation has stirred concerns about its implications on U.S. businesses and sovereignty.

“The EU’s Due Diligence Directive represents a landmark shift from voluntary corporate responsibility to mandatory obligations for corporations to prevent and address human rights abuses,” Tirana Hassan said.

Despite fierce opposition from some sectors, the directive has found substantial support within Europe, as many see the legal mandate as essential for ensuring responsible business practices globally. The European Parliament is also advocating for further protective measures, including an import ban on products made with child labor.