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Stakeholders Say No to the EU-Turn on Sustainability

Stakeholders Say No to the EU-Turn on Sustainability

Tim Mohin
May 23, 2025

Stakeholders are pushing back on the sustainability EU-turn
The majority of EU businesses are against the “Omnibus” simplification drive.
Despite the pushback, Political momentum for simplification continues
The climate gulf between the US and the rest of the world grows
The Trump administration unblocks wind power development
More IRA cuts in the House approved ‘Big Beautiful Deal’
Direct Air Capture caught in a scandal

Last week, we described the de-regulatory trend in Europe as the EU-turn. This week, new reports from the EU are challenging the prevailing narrative on deregulation.

A recent survey from We Are Europe of 1,000 EU company representatives found that only 25% of respondents support the Omnibus proposal, 61% like the Corporate Sustainability Reporting Directive as it is, and 51% are against the Omnibus simplification project.

These findings refute the narrative that reporting burdens will throttle competitiveness. Going a step further, more than 60% of businesses see the CSRD as an asset, not a burden.

Recent research from Influence Map shows that EU businesses increasingly support the Green Deal: Lobbying aligned with the Green Deal increased 20% since 2019. Companies fully or partially aligned with the goals of the Green Deal now make up 52%, while those misaligned fell by 20%. One of the researchers, Venetia Roxburgh, said, “Those opposed to the energy transition achieve outsized importance across public debate. However, this research demonstrates that there is a larger, quieter majority that is supportive of decarbonisation and driving progress through climate policy.”

Throwing even more support behind the Green Deal, 90 prominent EU economists signed a joint letter against the “Omnibus.” The letter “Beyond Short-term Profits” cites research saying that the Corporate Sustainability Due Diligence Directive (CSDDD) has widespread support, would cost companies little to comply with, and that reversing it would jeopardize long-term resilience for short-term profits.

Likewise, 31 legal scholars signed a letter claiming that removing Article 22 of the CSDDD - a provision to adopt and implement climate transition plans in line with the Paris Agreement - will lead to reduced climate action, greenwashing, and lawsuits.

Macron: Scrap the Due Diligence Directive

French President Emmanuel Macron

This week, French President Emmanuel Macron joined the new German Chancellor Friedrich Merz in calling to scrap the EU’s supply chain rule, the Corporate Sustainability Due Diligence Directive (CSDDD).

Macron’s statement: “CSDDD and some other regulations have not just to be postponed for one year, but to be put off the table,” puts the leaders of two of the EU’s most powerful nations at odds with the CSDDD.

Despite support from key stakeholders, this could be the beginning of the end for the CSDDD in an EU increasingly focused on backtracking on sustainability. The Green Deal, once set to be Ursula von der Leyen's political legacy, is now so politically toxic that her own party made its support for a Parliament text conditional on stripping out those two words.

A Widening Gulf

The U.S. federal government now stands virtually alone on climate. The Trump administration’s reversal of climate policy, removing data from key agencies, and hampering the energy transition puts the U.S. at odds with almost every other country and will limit the country's ability to understand and respond to climate risks. While the US policy favors fossil fuels, countries like Saudi Arabia and India are spending big on the energy transition, and China - which already dominates in clean tech - is set to release a very ambitious emissions reduction target.

Rachel Cleetus, from the Union of Concerned Scientists, said, “Here we see a [US] government that is taking a hatchet to the scientific enterprise. It’s the kind of destruction that will have implications for a while to come.”

On the corporate side, a new report indicates that most companies are continuing their sustainability programs - even “DEI” - but are communicating less.

Administration Softens Wind Power Stance

A $5 billion offshore wind project is set to continue work after the Trump administration's month-long block on the development. Anders Opedal, CEO of Equinor, the Norwegian company building the Empire Wind project, said, “I would like to thank President Trump for finding a solution that saves thousands of American jobs and provides for continued investments in energy infrastructure in the US.”

The resumption of the Empire Wind project comes after a change of tactics from offshore wind energy companies, which have stepped up lobbying efforts and legal challenges. Two weeks ago, 17 states sued the administration for withholding wind energy project funds, and some of the wind energy companies increased lobbying by up to 400%. However, the uncertainty is driving some away, Tomas Fertig of Entrion Wind said, “[The US] looks more like a third world country where you need to have quick recovery of investments, because you never know what’s going to happen in the future.”

Big Beautiful Deal Slashes IRA Tax Credits

Last week, we shared the “Big Beautiful Deal” - a House Bill to extend Trump’s tax cuts - would gut the tax credits under the Inflation Reduction Act. In the final bill that was narrowly approved by Congress this week, those cuts went deeper still. The new changes include:

Tax credits apply only to projects beginning construction within 60 days and placed into service before the end of 2028, which does not leave much wiggle room.
Credit transferability is now allowed only for nuclear projects.
The provisions for nuclear energy tax credits survived, and plans to sell off public land in Nevada and Utah were removed.

The bill will now go to the Senate. Expect more changes before it’s all over.

Direct Air Capture Scandal

Pioneering direct air capture (DAC) company Climeworks came under scrutiny this week after an Icelandic newspaper called them a ‘scam.’ The reasoning behind the claim was that the company's carbon removal facilities in Iceland failed to capture as much carbon as they emitted, and they have captured far less than they claimed.

A few days later, Climeworks announced unrelated layoffs of 22% of their staff, as climate tech funding slows and economic uncertainty builds.

While the Icelandic exposé shows that there are issues with carbon removal technologies like DAC, carbon removal is required under every IPCC net zero pathway, and these early facilities are fertile testing grounds for the nascent industry. As Andrew Winston says, “Think about the learning curves on building solar and wind -- costs fell exponentially, but it took years. Don't we need to see the same with (Carbon Dioxide Removal) CDR and even DAC?”

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.

Other Notable News:

Net Zero

Canada’s top pension fund dropped its net zero goal this week, saying "recent legal developments in Canada" made its net zero goal untenable.

Renewable Energy

The Spanish and Portuguese governments have asked the EU to add more grid interconnectors from France to the Iberian Peninsula to reduce the chance of any more mass blackouts.

Global Weirding

Sustainability Reporting

Japan's Accounting and Sustainability Board met with the EU’s standard-setting body, EFRAG, to find alignment and interoperability with the IFRS Sustainability Disclosure Standards (ISSB Standards).

Sustainability Research

Climate Tech

Sustainability reporting software provider Novisto raises $27 million in a Series C funding round.

Notable Podcasts:

In the most recent episode of Joel Makower and Solitaire Townsend's Two Steps Forward podcast, they interview Paul Hawken on his latest book, “Carbon: The Book of Life.” Together, they discuss why carbon dioxide should not be such a demonized gas, the limitations of technological carbon capture, and the potential of community-led climate movements.
In this week’s episode of Outrage and Optimism, the hosts speak to experts on what can be done about the recent blackouts in Spain and Portugal, which were partially due to the mismanagement of a renewable-powered grid. Kingsmill Bond of Ember and JoséManuel Entrecanales will give their account of what caused the grid failure and what can be done.

Notable Jobs:

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