A coalition of 16 U.S. State Attorneys General, led by Florida Attorney General James Uthmeier, has warned several major American companies, including Microsoft, Google, and Meta, against complying with the European Union’s landmark sustainability regulations, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) [1][2].

In letters sent to company CEOs in October, the AGs argued that the EU’s new sustainability laws would impose “unlawful” environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) mandates on American companies, potentially exposing them to lawsuits and enforcement actions in the U.S. The letters assert that adhering to the EU regulations could violate domestic laws and run counter to policies under the Trump administration [1][2].

The CSRD, adopted in 2023, mandates extensive sustainability disclosures covering environmental impact, human rights, and social standards, while the CSDDD requires large companies to identify, prevent, and mitigate negative effects on people and the planet, ranging from forced labor and pollution to deforestation. Together, they form the EU’s most comprehensive framework for corporate sustainability accountability [1].

Despite a framework agreement in August between the EU and the Trump administration pledging to limit burdens on U.S. firms, tensions have escalated. The administration reportedly threatened EU member states with trade and energy consequences in October if the CSDDD was not repealed or revised.

The coalition’s letters describe the EU regulations as “ambiguous and unascertainable,” warning that compliance could lead to antitrust violations and deceptive trade practice actions. They also criticize tech companies’ existing ESG and DEI initiatives, such as supplier diversity programs at Microsoft, Google, and Meta, calling them “misguided policies” that the CSRD and CSDDD would reinforce [2].

The AGs urged the companies to “comply with America’s laws” and reject the EU directives, requesting detailed responses on steps taken to do so. Signatories include officials from Florida, Alabama, Georgia, Texas, Idaho, and 11 other states, marking one of the most coordinated state-level challenges to EU sustainability policy to date [1].

The escalating transatlantic divide underscores a growing clash between the EU’s regulatory push for corporate transparency and the U.S. political backlash against ESG frameworks. For global corporations, this creates mounting pressure to navigate conflicting regulatory environments while maintaining consistent sustainability disclosures.

References
[1] ESG Today. Multi-State Coalition Warns Microsoft, Google, Meta Against Complying with EU’s CSRD, CSDDD Sustainability Laws. Retrieved from https://www.esgtoday.com/multi-state-coalition-warns-microsoft-google-meta-against-complying-with-eus-csrd-csddd-sustainability-laws/

[2] Business Quarter. Tech giants warned against EU sustainability laws. Retrieved from https://businessquarter.co.uk/tech-giants-warned-against-eu-sustainability-laws/