Leaders of the U.S. House Financial Services Committee, alongside chairs of the U.S. Senate Committee on Banking, Housing, and Urban Affairs and a related Senate subcommittee, sent a letter to the U.S. Treasury Secretary and the Director of the National Economic Council raising concerns about the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD). The lawmakers argue that the directive’s extraterritorial reach could harm U.S. competitiveness and urged the Administration to support European calls to indefinitely pause CSDDD. The letter contends that CSDDD would impose extensive supply-chain due diligence obligations tied to United Nations and Organisation for Economic Cooperation and Development principles that have not been ratified by Congress, potentially exposing U.S. firms to EU member-state enforcement and litigation risk. It cites an estimate that at least 300 U.S. companies in the S&P 1500 would be directly affected and notes potential knock-on impacts for U.S.-based small business suppliers, penalties of up to five percent of global turnover, and the directive’s application to companies meeting a EUR 450 million turnover threshold. The lawmakers also urged removal of CSDDD’s civil liability provision (Article 29), opposed mandatory transition plans (Article 22), and asked the Administration to clarify that U.S. companies are not bound by net zero transition plans akin to those required for EU firms.
U.S. Financial Services Committee 2025-02-27
U.S. House Financial Services Committee chairs urge Treasury to oppose the EU Corporate Sustainability Due Diligence Directive and back an indefinite pause
U.S. House Financial Services Committee leaders and Senate counterparts have expressed concerns to the U.S. Treasury and National Economic Council about the EU's Corporate Sustainability Due Diligence Directive (CSDDD). They argue its extraterritorial reach could harm U.S. competitiveness, affecting at least 300 U.S. companies and imposing penalties up to 5% of global turnover. The lawmakers urged the Administration to support pausing CSDDD and clarify that U.S. firms are not bound by EU-style net zero transition plans.