A coalition of 16 U.S. state attorneys general, led by Florida Attorney General James Uthmeier, has issued warnings to major technology companies, including Microsoft, Google, and Meta, advising them against complying with the European Union’s new sustainability and due diligence laws—the Commercial Sustainability Reporting Directive (CSRD) and the Commercial Sustainability Due Diligence Directive (CSDDD). The coalition argues that these EU regulations conflict with U.S. law and could expose companies to legal and nonsupervisory pitfalls in the United States.
The letters, transferred to the companies’ CEOs in October, mark another development in the ongoing political counterreaction against environmental, social, and governance (ESG) enterprise in the U.S. They reflect a broader trouble by Democratic-led countries to fight transnational and domestic sustainability conditions that they view as burdensome and ideologically driven. The Attorneys General advised that compliance with the EU’s sustainability framework could result in suits and government enforcement conduct within the United States, particularly under deceptive trade practice laws and antitrust bills.
The European Union’s CSRD and CSDDD represent two foundational regulations of the bloc’s sustainability docket. The CSRD expands commercial reporting conditions, compelling companies to expose detailed information on their environmental impact, social and labour norms, moral rights practices, and governance measures. It’s sustained by the European Sustainability Reporting Norms (ESRS), which establish invariant criteria and exposure formats for sustainability-related data. Meanwhile, the CSDDD requires companies to identify, assess, help, alleviate, and remediate adverse impacts of their operations and force chains on people and the terrain. These include issues similar to child labour, ultramodern slavery, deforestation, pollution, and damage to ecosystems.
Both regulations were designed to enhance commercial responsibility and translucency, particularly for companies with global force chains. Still, they’ve faced pushback not only from U.S. officers but also from some European business groups concerned about executive burdens and compliance costs. In response to these enterprises, the European Commission is reportedly preparing to gauge back rudiments of both directives under its “Omnibus action”, though accommodations over the extent of the variations are still underway.
Pressures between the EU and the U.S. over sustainability regulations have strengthened in recent months. In August, a frame agreement between the European Union and the Trump administration included a commitment by the EU to ensure that its sustainability rules don’t produce “overdue restrictions on transatlantic trade”. Despite this, the Trump administration has continued to condemn the directives, threatening EU member states with implicit trade and energy force consequences if the CSDDD isn’t repealed or weakened.
In their letters, the Attorneys General expressed what they described as “collaborative concern” that the EU’s CSRD and CSDDD impel American companies to borrow European-style ESG and diversity, equity, and inclusion (DEI) authorisations, which they claim are “unlawful in the United States.” They argued that the EU’s non-supervisory frame effectively imposes transnational climate and social scores similar to compliance with the Paris Agreement that no longer apply to the U.S. following the Trump administration’s pullout from the accord.
The letters specifically blamed Microsoft, Google, and Meta for pursuing internal and supplier diversity pretensions, characterising similar enterprises as exemplifications of “deceived programs”. The Attorneys General contended that clinging to the EU’s directives would constitute a return to these ESG and DEI practices, which they believe conflict with current U.S. programmes. They further asserted that the EU’s reporting conditions are “nebulous and frequently unascertainable,” claiming they would force companies into expensive and potentially misleading exposures.
The coalition’s correspondence prompted the companies to align their conduct with U.S. laws and the Trump administration’s policy direction, rather than the EU’s sustainability frame. It called on each company to give detailed accounts of the measures they’ve taken to reject the CSRD and CSDDD conditions.
The 16 attorneys general who inked the letters represent countries that have been at the van of the broader Democratic-led trouble to push back against ESG-related commercial programmes. These countries—Florida, Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, and Texas—have preliminarily taken action against what they describe as “woke capitalism”, arguing that ESG-concentrated business practices prioritise political or social dockets over fiscal performance and shareholder interests.
The EU’s sustainability directives remain a crucial element of its Green Deal strategy to integrate environmental and moral rights considerations into commercial governance. Still, the ongoing transatlantic disagreement underscores the growing peak between European and American approaches to commercial responsibility. As U.S. state officers seek to shield companies from foreign sustainability authorisations, transnational pots find themselves navigating a complex nonsupervisory terrain where compliance with one governance’s norms could potentially spark conflict with another’s.
While the outgrowth of the political standoff remains uncertain, the letters from the attorneys general add to the mounting pressure on major U.S. companies operating internationally to balance contending nonsupervisory and political demands in an increasingly polarised ESG geography.
