In the US, ESG remains politically charged, but internationally it is a condition of doing business. | Sasirin Pamai / Shutterstock
The European Union’s sustainability agenda remains the most far-reaching globally, but as of late 2025 it has entered a phase of recalibration and political compromise.
Responding to pressure from industry groups, foreign governments and European businesses, the European Commission has slowed and softened the rollout of two cornerstone regulations: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
While the stated goal is to protect the long-term vision of sustainability governance, the move is also meant to ease the short-term compliance burden that has generated resistance across industries.
Under the revised timetable, non-EU and small to midsize entities will not begin CSRD reporting until between 2027 and 2029. The CSDDD’s first requirements now take effect in July 2028, roughly a year later than planned.
And the scope of both directives has been narrowed, with CSRD thresholds raised to cover only the largest firms and CSDDD limited primarily to companies exceeding 5,000 employees and €1.5 billion ($1.73 billion) in annual turnover. These adjustments effectively remove many US midmarket companies from the immediate reach of the rules, and that would include most ITAD firms.
At the same time, the Commission is streamlining the reporting process by cutting redundant disclosures, clarifying how to apply the double materiality test and seeking closer alignment with international frameworks such as the IFRS Sustainability Disclosure Standards. Officials describe these refinements as pragmatic steps to focus on high-quality, verifiable data rather than an unmanageable flood of reports.
Sharp contrast with US political landscape
The regulatory moderation in Brussels contrasts sharply with the political environment in Washington, where ESG-related initiatives have become a flashpoint. A coalition of 16 Republican state attorneys general recently sent letters to Microsoft, Google and Meta, urging them not to comply with CSRD or CSDDD requirements.
The letters warned that doing so could violate US law and expose companies to litigation over antitrust and deceptive business practices. The episode reflects a growing divide: Global corporations are caught between European mandates for disclosure and an American political landscape that increasingly questions the legitimacy of ESG compliance.
This divide is already reshaping corporate behavior. State Street Global Advisors, one of the world’s largest asset managers, withdrew its US business from the Net Zero Asset Managers initiative but kept its European operations enrolled. The firm cited domestic political pressure as incompatible with the commitments required by the initiative, even as European clients continued to demand credible climate reporting.
BlackRock and Vanguard have made similar moves, distancing themselves from ESG alliances in the United States while maintaining participation overseas.
The contrast underscores how geography now determines corporate identity and reporting posture. Within Europe, enforcement remains robust. The European Commission’s investigation into airline greenwashing led more than 20 carriers, including Air France, Lufthansa and KLM, to withdraw misleading environmental claims and drop advertising that described flights as “carbon neutral.” The case illustrates how European consumer protection laws are being used alongside corporate regulations to uphold sustainability integrity.
Meanwhile, Norway’s sovereign wealth fund, NBIM, has tightened its Climate Action Plan for 2030, pledging to vote against boards that fail to address climate risk adequately. The moves reinforce the EU’s broader stance: Sustainability performance is not just a branding exercise but an enforceable component of market access and fiduciary duty.
Preparation is key for US-based firms
For US companies, the implications are twofold. The immediate compliance pressure has eased for many organizations that now are above the adjusted thresholds, and those that remain in scope have gained extra time to prepare.
However, the direction of policy remains clear. Companies dealing with European investors or customers will need robust sustainability data systems and due diligence processes regardless of their size. The regulatory pause provides breathing room, not an exemption.
The practical path forward is preparation. Firms with exposure to Europe should identify which subsidiaries or supply-chain partners fall under CSRD or CSDDD, strengthen internal ESG data collection and plan for third-party assurance. Even companies below the threshold will face pressure to supply sustainability information through contractual flow-downs from larger European partners.
In the US, management teams continue to walk a fine line. Domestically, ESG remains politically charged; internationally, it is a condition of doing business. The safest approach is to frame sustainability within a risk and governance context—protecting assets, managing future regulation and meeting client expectations—rather than as a political statement.
And so while Europe is transforming sustainability into enforceable law, the US system fragments into competing jurisdictions and political narratives. Global corporations now operate across asymmetric regimes that demand both transparency and caution.
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