Palmetto State News

Senate Banking Committee Chairman Tim Scott and several other lawmakers have raised concerns about the European Union's Corporate Sustainability Due Diligence Directive (CSDDD). The directive, which mandates companies to evaluate supply chains for human rights and environmental abuses, has been criticized for its potential impact on U.S. competitiveness.

In a letter addressed to Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hassett, Scott, along with House Financial Services Committee Chairman French Hill, Subcommittee Chairmen Ann Wagner and Andy Barr, and Senate Banking Subcommittee Chairman Bill Hagerty, highlighted the risks posed by CSDDD. They argued that compliance with the directive would require significant resources from U.S. companies, potentially diverting funds from critical areas such as research and development.

The lawmakers wrote: “CSDDD imposes stringent due diligence requirements on in-scope companies... these principles have not been ratified by Congress.” They also expressed concerns over increased litigation risks and enforcement actions from EU member states.

The letter further stated: “Beyond economic risks, CSDDD undermines U.S. jurisdictional sovereignty." It urged the administration to support efforts to pause CSDDD indefinitely and to clarify that U.S. companies are not bound by similar climate commitments imposed on EU firms.

This move builds on previous efforts by Scott to prevent burdensome European climate-related policies from affecting U.S. businesses. In June 2023, he had requested information on activities coordinated with the EU regarding environmental measures impacting American industry.

In September 2024, Scott joined other lawmakers in urging Treasury Secretary Janet Yellen to advocate for delaying or modifying CSDDD’s implementation to protect U.S. economic interests.