New European law would force US businesses to adopt woke rules

European Union officials in May approved radical legislation that could severely harm the U.S. economy, undermine individual rights, and force thousands of American businesses to adopt left-wing values. If this law takes full effect in America, the country may never recover.

The Corporate Sustainability Due Diligence Directive attempts to transform business practices globally by imposing environmental, social, and governance requirements on large businesses operating in the European Union. The law applies regardless of whether a company is headquartered in a country outside the EU.

Virtually every US industry will be impacted by the CSDDD, including vital industries like America’s massive agricultural sector.

Under the CSDDD, covered businesses will be required to adopt a long list of “due diligence” practices, many of which align with left-wing ideological views.

Covered companies will not merely be mandated to change their own operations, however. They will also be required to coerce many of their business partners to alter their practices too, no matter where they are located.

Large businesses covered under the terms of the CSDDD include European Union-based businesses with at least 1,000 employees and a net worldwide turnover greater than $489 million. (Net turnover is similar to revenue.)

Non-EU companies are covered under the law if they have a net turnover of $489 million in the European Union. This includes U.S. businesses.

Among the many requirements in the law are limits on land use, water consumption, and biodiversity loss. The CSDDD also demands that companies transition their operations so that they are dependent on “green energy” — no matter how economically disastrous the transition is — and forces companies to restrict certain kinds of “disinformation” too.

Labor unions are also provided with substantial legal protections, and numerous binding EU and U.N. agreements are imposed on private businesses.

The CSDDD requires EU companies to adopt national policies that comply with these and other baseline rules established by the legislation, but EU countries are free to adopt even stricter standards at the national level.

Businesses that fail or refuse to comply with the law will face gargantuan fines that could equal 5% of a business’s net worldwide turnover. The CSDDD also allows individuals or activist organizations to sue violators of the law for alleged damages, opening the floodgates to left-wing lawfare.

The law would be phased in over several years, beginning in 2027, and many of the largest corporations in the United States will be required to comply with its terms.

Effects on America

Based on publicly available financial reports, it’s likely that many iconic American brands — such as Amazon, Apple, Google, Ford, Cargill, McDonald’s, Meta, Microsoft, and Sysco Foods, among many others — would be subjected to the CSDDD.

This, however, is just the tip of the iceberg. The directive requires that covered large companies force many of the businesses upstream and downstream in their “chain of activities” to adhere to many of the CSDDD rules as well, regardless of how much business those smaller companies do in Europe.

For example, a hypothetical U.S. steel manufacturer in Texas that sells its products to Ford would be mandated to adopt EU ESG rules because Ford’s revenue in the European Union places it under the requirements of the CSDDD.

The same is true for warehouses and transportation companies that do business with Ford, along with dozens of other businesses in Ford’s chain of activities.

The CSDDD requires Ford and other large covered American companies to use contractual agreements to enforce the law’s ESG mandates on business partners.

Nowhere to hide

Virtually every U.S. industry will be impacted by the CSDDD, including vital industries like America’s massive agricultural sector.

For instance, consider the impact of Sysco Foods, the largest food distribution company in the United States. Through its subsidiary, the International Food Group, Sysco operates in numerous regions outside America, including in EU countries like France. In France, Sysco’s revenues in 2023 were $1.6 billion, which means it would be a covered company under the new EU ESG law.

Sysco has thousands of suppliers, all of whom will need to comply with the EU ESG law in some form.

According to Sysco’s 2023 annual report, the company’s supply network includes “large corporations selling brand name and private label merchandise, as well as independent regional brand and private label processors and packers.”

It also includes “specialty and seasonal products from small to mid-sized producers to meet a growing demand for locally sourced products. Our locally sourced products, including produce, meats, cheese, and other products, help differentiate our customers’ offerings, satisfy demands for new products, and support local communities.”

All these suppliers, including the local farmers mentioned in Sysco’s report, would need to comply with the novel EU ESG law.

A massive wealth transfer

Not only would Europe’s new ESG law crush the U.S. economy by forcing businesses to adopt countless regulations and by imposing a transition to more expensive, less reliable energy sources like wind and solar, but it would also mandate one of the largest wealth transfers in history.

Under the terms of the CSDDD, covered companies “should … provide targeted and proportionate support” for a small or medium-sized business partner, including:

by providing or enabling access to capacity-building, training or upgrading management systems, and, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME, providing targeted and proportionate financial support, such as direct financing, low-interest loans, guarantees of continued sourcing, or assistance in securing financing.

In other words, covered U.S. companies will be mandated to transfer wealth to small and medium-sized businesses all over the world, including China, so that they can also adopt the EU’s ESG rules. The real victims will be American families, who will endure the higher costs passed on to them.

The end of sovereignty

The EU’s new ESG law is nothing short of a direct assault on the sovereignty of the United States. Americans have no interest in or use for Europe’s failing policies.

Unfortunately, though, the fundamental transformation of America and other nations outside the EU imagined by the framers of the CSDDD is inevitable — unless, that is, U.S. politicians push back hard and fast against it.

You’ve heard it before: Elections have consequences. But thanks to the terms of the Corporate Sustainability Due Diligence Directive, the consequences of the 2024 election could be greater than ever. Let’s hope voters make the right choice in November.