Brussels (Belgium) (AFP) – France on Friday asked the European Union to suspend “indefinitely” landmark new rules on environmental and human rights supply chain standards, saying they were too burdensome for businesses. The call comes as Brussels has vowed to make life easier for firms complaining about excessive regulation, as the 27-nation bloc scrambles to revamp its economic competitiveness.
“Our companies need simplification, not additional administrative burdens,” French European Affairs Minister Benjamin Haddad said on X in announcing the request from Paris. He also asked for a review of a second set of reporting rules on corporate sustainability that have come under attack from European business lobby groups.
Brussels worries that the EU is failing to keep up with the United States and facing mounting competition from China amid an array of challenges including low productivity, slow growth, high energy costs, and weak investments. EU chief Ursula von der Leyen told this week’s gathering of the world’s elites in Davos that Brussels “must make business much easier all across Europe.”
“Too many firms are holding back investment in Europe because of unnecessary red tape,” she said, adding that the European Commission would launch a “far-reaching simplification” — citing the “due diligence” rules France is now asking be suspended.
Under what is known as the Corporate Sustainability Due Diligence Directive (CSDDD), large companies are required to identify and address the “adverse human rights and environmental impacts” of their supply chains worldwide. A group of nine aid and environmental groups including Oxfam France and Bloom denounced Paris’s “irresponsible” call for a delay, which risked “precipitating the unraveling” of legislation necessary to tackle climate and social problems.
“This French position is simply incompatible with the European climate objectives,” the NGOs said. Approved last March, the CSDDD is one of a series of mammoth laws passed by the bloc in recent years to fight climate change and improve business practices, which are now facing renewed scrutiny.
France already has its own due diligence law obliging larger companies to explain measures taken to identify and prevent rights and environmental violations linked to their activities. Haddad also called for a review of the Corporate Sustainability Reporting Directive (CSRD), which requires large companies to provide investors and other “stakeholders” with information on their climate impacts and emissions, and the actions being taken to curtail them.
The French government this week described the CSRD rules as “hell for companies”, joining a growing chorus of criticism by executives and others arguing requirements are too onerous. Large companies must implement the CSRD for the first time in their annual results for 2024.
This week, a lobby group for Germany’s big businesses said European companies opposed both sets of EU rules, arguing they “should not be exposed to disproportionate standards” compared to overseas rivals, urging deregulation. It was echoed by BusinessEurope, the EU’s main business lobby, which on Wednesday said firms urgently needed “a bold signal” that the EU was serious about cutting regulatory burdens.
But the move from Paris drew sharp criticism from EU lawmakers on the left and centre. “This means destroying the only two European laws that aim to set rules around globalization,” charged Manon Aubry, who led work on the due diligence law for The Left. Likewise, Pascal Canfin, a French member of the centrist Renew, said his group was in favour of “simplifying” the texts — but not delaying them.
© 2024 AFP
