The White House “Explore commercial tools” specific to combat the European game rules of capital markets on ESG criteria, environmental, social and corporate governance factors that are taken into account when investing in a company.
The latent threat is additional to the announced tariffs on steel products or those that prepares with VAT as an excuse, and has departed from the Secretary of Commerce, Howard Lutnick. The Banker of Wall Street predilect of Elon Musk, and executor arm of the tariff policy of the Trump 2.0 Legislature, wants to demolish the known as due diligence directive on corporate sustainability (CSDD, according to its acronym in English).
This European standard legally covers and induces in practice the opening of judicial litigation against companies that fail to comply with these requirements in any phase of their productive or supply chains. Among others, the obligation to apply decarbonization plans and zero emission projects. It applies even to companies outside the internal market, if your businesses are intended for European customers.
It is a part of the doctrine that has been taken from the Lutnick hat to affirm that community regulation imposes an “excessive bureaucratic burden” and to ensure, before a wide cast of republican congressmen, that the Trump administration will use long -range commercial weapons against The EU to protect its private sector, preserve the US economy and ensure national security. This is stated in the minutes of January 29 of the Commerce, Science and Transportation Commission of the Senate to which Bloomberg has had access.
Lutnick went further and warned that he will actively work to “avoid excessively burdensome regulations against the business of American firms abroad”, because what is at stake “is the safeguard of our industry and our productive model” and the situation “” It is serious. ”
Washington’s declaration of intentions arrives at a transcendental moment. The European Commission faces intense pressure inside and outside the community space to rebuild part of its environmental regulatory framework. It does so at a time when the energy transition is guessed much cheaper than the market analysis foreshadowed, due to the acceleration of green technologies focused on the reduction of polluting gases and the stimulus of business and sustainable finances.
The valuations that, until now, overestimated energy demand and underestimated advances in innovation to reduce CO2 emissions to the atmosphere have also been reviewed. According to calculations of The Economistthe cost of the energy transition is far from the 12 billion dollars per year in its worldwide computation, and much closer to the 3 billion. This would question the maximum Trumpist that climate change “damages the Americans and costs a fortune.”
The European Commission, from the department of its Executive Vice President, the Spanish Teresa Ribera, is working to fiscally encourage sustainable investments and expand to the entire European club the so -called Iberian exception in cases of pricing crisis, to reduce the electrical invoice by separating it from The gas price. They would be ways to win the competitive advantages in costs that Mario Draghi recommended in its report to rival the ostensibly cheaper energy that Americans and Chinese enjoy. Among these tools, Brussels analyzes Delieve business investment in environmental innovation or cuts in the VAT of light.
Mill wheels
On paper, Europe continues with its ambitious green agenda, aimed at reducing its CO2 emissions by 55% by 2030 and 90% in 2040. But the effort can be left in borage water. The Franco-German axis has formally asked Brussels to reduce the scope of environmental standards for its alleged brake on productivity and growth. And the petition has followers in the community government.
Among others, Valdis Dombrovskis, commissioner in charge of the regulatory simplification, who has assured that “the content of the CSDD Directive” is reviewed by term, to evaluate “how many levels, up and down, of the value chain it must control” and its power of “influence” on the different levels and corporate businesses. The initiative affects the community heritage in this area. Not only to the CSDD, but also to the rule that requires thorough certificates to companies so that investors can determine the veracity of their green projects -a kind of new audit methods to promote the authenticity of sustainable policies -, or Taxonomy regulations that identify corporate operations that eliminate carbon traces.
Brussels will reveal in the next few days its plans that, according to their initial criteria, will cover a “high range simplification”. A petition that, from the US, is not exclusive to the Trump administration. The former Treasury Secretary, Janet Yellen, alerted at the time that, although the government of Joe Biden supported “the high -level objectives of the CDSD”, he also worried the “extraterritorial” scope and the “potential negative consequences ”For US companies.
It is a recurring matter and the American Chamber of Commerce before the EU (AMCHAM), which has among its partners with Ford, Exxon Mobil or Amazon, has just been expressly requesting Brussels to stop the main points of its framework of media and social measures. The US Cameral Institution states that companies should, at least, have freedom to ignore European regulations on ESG until a legislative review has been completed. Or in other words: enjoy a regulatory truce, pending the dissolution of its laws. The entity, yes, boasts that its associates support the agreements of Paris and “use significant resources of good responsible business praxis.”
Perhaps the equilibrium point that the Commissioner of Financial Services, María Luis Alburquerque. For the Portuguese, “in the light of criticism, there is room to introduce adjustments in ESG regulations”, but “you can’t expect total deregulation.” It is about “adjusting the rhythm”, but “maintaining the legal apparatus.”
Trajectory changes
This ignition debate has broken into the German campaign for this Sunday’s elections, although not as much as economic, energy and national security or immigration. The scenario points to a more or less abrupt interruption of climatic subsidies, frozen in recent months. The Minority Social Democratic government was forced to readjust its budgetary expenses after allocating billions of euros in direct aid, with a view to reducing their greenhouse gases in almost two thirds at the end of the current decade.
Only the proposals of the greens are completely aligned with the European objectives, they alert at the Reiner Lemoine Foundation. The conservative CDU/CSU, a favorite in the surveys, has aroused suspicion between the steel or wind industry because of its doubts about the effects of subsidies. The SPD has canceled a thousand renewable projects since Foreign Minister Olaf Scholz announced his intention to anticipate the elections.
Also in the global order the American deregulatory demand can be a torpedo in the flotation line of sustainable investments. Throughout 2024 the great managers, with Blackrock at the head, have admitted that their portfolios have become less green and more likely to swell fossil assets due to their greater stock market performance in the last biennium.
Even so, and for the disgust of Larry Fink, founder of the world’s biggest manager, ESG capitals have shown a strong resilience. In 2023, they reached 25.13 billion dollars – a figure very similar to that of 2022 – and in 2024, despite the recess that the market beads predicted, they were 29.86 billion, a value similar to that of the US GDP , according to the data of the predecence analysis signature.
The projections point to an average annual increases of 18.8% between 2024 and 2034, with Europe dominating the sustainable fund market, says Morningstar experts. However, movements such as Greenpeace have sued the EU for accepting nuclear energy and gas within its green labels. And liberal professions, such as consultants or legal advisors, have loaded against the high demands of European environmental audits.
In the US, several Republican governors already banned the use of green values in their private state pension funds or their debt emissions, among other official investments, preceding the turn that was foreseen under Trump’s reins.
Silvia Merler, a researcher at the Bruegel Institute, considers that Europe “must continue to insist companies to align with the objective of zero net emissions.” This, in his opinion, “does not collide with the option of making pragmatic legal changes that help give relief to bureaucratic charges that could drown companies.”
Faced with the US attack against corporate sustainability, “Europe must ensure its green leadership in the world,” Merler warns. Because the American bank has already come since October 2023 subject to strong political pressure to reverse its climatic commitments. That is the reality, he says, in front of slogans that encourage the weakness of the EU as the one that ensures that “USA Innova, China Replica and Europe regulates.”
Hence, the old continent must be guaranteed a regulatory environment that helps instead of hindering its demanding sustainable agenda and moves away from the criteria of the new head of the SEC – the American CNMV – of unprotected of environmental rules to private businesses.
Roberto Giovannini, from Renewable Matter, shares this thesis: “Americans want to sell us their products and services, but not comply with our laws.” To the point of “wanting to intercede” in the Bus Package that will be presented next Wednesday and that the CDSD Directive, the Ecological Audits and the European Green Taxonomy must be reviewed.
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