US wants EU CSDDD to apply only to EU firms

The United States has expressed concerns over the extraterritorial reach of the EU's Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD). According to a government statement, these directives impose significant reporting burdens on US businesses, differing from the US' single financial materiality standard.

The statement emphasized that the CSDDD's application to non-EU companies with limited ties to the EU market would create duplicative and potentially conflicting obligations for US firms, potentially violating principles of international comity. Consequently, the US has called for the EU to significantly limit the application of the CSDDD to EU subsidiaries or business partners of US firms, and restrict the scope to goods produced in or services supplied from the EU.

Furthermore, the US seeks to prohibit any penalties on US businesses based on revenue derived from non-EU activities, and prevent private rights of action not founded on official supervisory enforcement findings.