Transnational ESG

The European Union’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) represent transformative developments in global ESG regulation. These ambitious mandates, core to the EU’s European Green Deal, impose significant environmental and human rights obligations not only on EU companies but also on thousands of non-EU firms—including US companies—with operations or business ties within the bloc. This article explores the implications of these directives for US firms and policymakers, emphasizing their extraterritorial scope and normative ambition. Unlike US law, which is mired in debates over financial materiality and limited by anti-regulatory sentiment and anti-majoritarian structural constraints, the EU directives adopt sustainability as a stand-alone legal goal. These directives position the EU as a de facto global ESG standard-setter, displacing the influence of US corporate governance-based reforms. The Article argues that the EU’s uniform, binding rules offer a more effective and democratic pathway to sustainability than shareholder-driven approaches in the United States, which rely on inconsistent support from mutual funds and only impact public companies. Ultimately, EU leadership in ESG regulation may better reflect the values of the American public than domestic lawmaking currently can, given political dysfunction and regulatory stagnation in the US

Business · Sustainability · Corporate Law and Human Rights · International Environmental Law and Policies · World Trade Organization Law

• Majority representation and legitimacy

  Open Access•Christopher Wratil, Jens Wäckerle•European Journal of Political…•2023

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