EU: Cutters are expected in the corporate sustainability rules under pressure from France and Germany

It may reduce its corporate sustainability reporting requirements (ESG), as France is preparing to present an official proposal aiming to limit the implementation of the regulatory framework, according to a Bloomberg report. In particular, the French Government is preparing a new set of recommendations aimed at restricting the corporate sustainability report directive and may present its proposal already this week. This development means that the EU’s two largest economies are now pushing the European Commission to cut back on the CSRD, since the German government last month urged the EU executive arm to restrict the directive. CORVERSE This is because new evidence shows that Europe’s largest economy shrunk for the second consecutive year in 2024, with many entrepreneurs and Members blaming the regulations on loss of competitiveness. “There is a common diagnosis of the need to lighten the burden on businesses so that this is proportionate to the challenges we face,” said Robert Benefits, president of the French Accounting Standards Authority and former head of the country’s financial regulatory authority. “The differences concern more the size and timing of what needs to be done”. The European retreat from its ambitions in the field of ESG (environmental, social and governance) coincides with a new political reality in the US, where President Donald Trump is committed to cancelling the climate policies of the Biden era, strengthening fossil fuel production and imposing tariffs on goods from countries traditionally considered allies. The European Commission may choose to support significant restrictions on the scope of the CSRD by discussing private consultations. The talks continue and the Commission continues to take into account new information, according to Bloomberg.