Washington, D.C. – Senator Tim Scott (R-S.C.) has joined Senator Bill Hagerty (R-Tenn.), Representative Andy Barr (R-Ky.-06), and other colleagues in urging Treasury Secretary Janet Yellen and senior Biden-Harris administration officials to address what they see as regulatory overreach from the European Union (E.U.). The concern stems from the E.U.'s Corporate Sustainability Due Diligence Directive (CSDDD), adopted in May, which enforces progressive social and climate policies on international businesses, including those based in the United States.
The CSDDD requires many U.S. companies to comply with European regulations or face significant penalties. This directive raises issues regarding extraterritorial regulatory overreach, potential impacts on supply chains, litigation risks, and demanding climate transition requirements.
In their letter to Secretary Yellen, the lawmakers urge engagement with European counterparts to delay the implementation of CSDDD and to consider its repeal or substantial modification. The letter states: “The CSDDD’s extraterritorial scope amounts to a serious breach of U.S. sovereignty and a direct threat to the global competitiveness of American companies.”
The legislators express concern that "the [Biden-Harris] Administration is surrendering its regulatory responsibilities to European officials," allowing them to impose stringent social and climate policies on American businesses. They argue that such policies should be decided by elected representatives in the United States rather than "overseas bureaucrats advancing their own agendas."
This recent letter builds on previous oversight efforts by Ranking Member Scott aimed at preventing the imposition of burdensome European climate-related disclosure policies on U.S. businesses. In June 2023, Scott and Rep. James Comer (R-Ky.-01) sought information from both the Department of Treasury and the Securities and Exchange Commission (SEC) regarding activities coordinated with the E.U. on environmental, social, governance (ESG), and climate-related measures impacting U.S businesses.
Scott's June 2023 letter warned against advancing the E.U.’s ESG agenda over U.S. interests, stating it would be "contrary to Treasury’s role" in promoting economic success for American firms. It also highlighted potential harm to sectors such as oil and gas, agriculture, and capital markets.
Following an unsatisfactory response from the SEC regarding these concerns, Scott and Comer requested interviews with SEC officials to better understand their involvement in developing E.U.-related corporate disclosure directives.