A coalition of 16 Republican state attorneys general, led by Florida Attorney General James Uthmeier, has issued formal warnings to major technology firms including Microsoft, Google, and Meta, urging them not to comply with the European Union’s new sustainability reporting and due diligence rules, known as the CSRD (Corporate Sustainability Reporting Directive) and CSDDD (Corporate Sustainability Due Diligence Directive). The letters, sent in October, accuse the EU of imposing “unlawful ESG and DEI mandates” on U.S. companies and caution that compliance could lead to lawsuits, antitrust issues, and deceptive trade practice actions within the United States.

Mounting Political Pushback Against ESG Regulation

The move marks the latest escalation in the U.S. anti-ESG campaign, where Republican lawmakers have increasingly targeted corporate sustainability initiatives as politically driven. The attorneys general argue that adhering to the EU’s sustainability laws would contradict Trump administration policies and violate domestic legal standards. Their intervention follows a transatlantic trade agreement reached in August, under which the European Union and the Trump administration agreed to explore ways to reduce the burden of the CSRD and CSDDD on U.S. firms. Despite that understanding, the administration reportedly threatened EU member states in October with potential trade and energy supply repercussions if the directives were not scaled back or repealed. Both regulations are central to the EU’s sustainable economy agenda. The CSRD requires companies to report detailed information on their environmental, social, and human rights impacts under the European Sustainability Reporting Standards (ESRS). The CSDDD, meanwhile, obliges companies to identify and mitigate risks such as child labor, deforestation, pollution, and supply chain abuses. However, both laws are currently under review as part of the European Commission’s Omnibus initiative, with potential revisions expected to narrow their scope and ease compliance burdens for foreign firms.

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The Attorneys General’s Case Against Compliance

In their letters, the coalition claims the EU’s sustainability directives would compel American companies to “follow European ESG and DEI mandates” that run counter to U.S. law. The AGs argue that the regulations’ “ambiguous and unascertainable” requirements could expose corporations to domestic litigation risks. They also accuse the EU of attempting to “force compliance with the Paris Agreement,” despite the United States’ withdrawal from the accord under President Trump. The letters specifically criticize existing diversity and sustainability initiatives at each of the targeted companies, such as Microsoft’s supplier diversity targets and Meta’s and Google’s ESG disclosure programs, warning that compliance would mark “a return to misguided policies.”

“Bowing to the unlawful CSRD and CSDDD demands would be a step in the wrong direction,” the AGs wrote, calling on the companies to “immediately comply with America’s laws and the Trump Administration’s policies” and to submit written confirmation detailing steps taken to reject the EU’s sustainability requirements.

The signatories include attorneys general from Florida, Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, and Texas.

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The Regulatory Divide Between the U.S. and EU

The warnings underline the deepening regulatory rift between Washington and Brussels on corporate sustainability disclosure and accountability. While the EU is doubling down on mandatory ESG transparency, the U.S. political landscape has moved sharply in the opposite direction, with state-level initiatives to curb what critics call “woke capitalism.” For multinational corporations like Microsoft, Google, and Meta, each of which operates under both jurisdictions, the tension highlights the growing compliance dilemma: adhere to European sustainability standards and risk domestic political backlash, or limit reporting and face scrutiny from EU regulators and investors. With the CSRD and CSDDD slated to begin phased implementation in the next two years, the outcome of this political standoff will likely shape how U.S. corporations balance climate accountability and legal exposure in one of the world’s most consequential regulatory divides.

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