The current directive undergoing “simplification”, the Corporate Sustainability Due Diligence Directive (CS3D), mandates global supply chain sustainability and transparency disclosure rules for thousands of companies that do business in Europe.
CS3D imposes excessive compliance burdens on companies and disincentivises investment in the EU amidst a backdrop of rising costs and administrative burdens. With the EU’s economy already struggling, its time politicians woke up to the madness of our regulatory regime and its impact on our future.
Cracks in the Green Deal
For European Commission President Ursula von der Leyen, CS3D represents two failures: the failure of the Green Deal to change companies’ behaviour or encourage them to participate in the European marketplace, and the failure of the EU to craft policy that will solve its high energy cost and competitiveness crisis.
Politicians are finally facing the disaster of this policy, but the question remains: will they actually take the steps to end foolish bureaucratic climatism? Or will Europe continue to prioritise principles over the well-being of its people? Abandoning the name ‘Green Deal’ in favour of ‘Clean Deal’ is an unnecessary and fanciful proposal by von der Leyen.
The EU urgently needs to lower energy prices, restore competitiveness and innovation, and encourage investment and job creation. However, CS3D will do none of those things. Instead, it adds an expansive layer of compliance and paperwork overtop EU and member states’ already cumbersome disclosure requirements, further hindering their ability to compete globally.
This time, companies have had enough of the EU’s bureaucratic hurdles. A growing chorus of politicians, economists, corporations, and industry associations are calling upon Brussels-Strasbourg to meaningfully reduce CS3D’s many obligations and mandates.
Some companies, both large and small, are weighing whether it is more economical to opt out altogether and pay the hefty fine for non-compliance; I received first-hand testimony from the person in charge of this calculation at a large German SME. Other companies are reevaluating whether it’s worthwhile to do business in the EU at all—cancelling planned investments and shutting down current projects. This is already dramatically the case in the chemical industry.
These are businesses that want to conduct their operations ethically and sustainably but cannot justify the cost of compliance, or the legal risk of getting it wrong. Who does this benefit?
Opposition in European Parliament
Some MEPs in Brussels are realising that CS3D is untenable, with debate raging on how to simplify EU climate legislation.
The so-called omnibus simplification package promises to roll back reporting requirements, a much-needed step to rectify the failure of the EU’s decarbonisation plan. How far ‘simplification’ goes is yet to be seen.
Unsurprisingly, the coalition cannot seem to find a compromise, with talks breaking down over ideological lines. Parliament would be wise to accept the proposal with the least red tape if it wants to salvage the EU competitiveness. As EPP’s Jörgen Warborn wisely remarked, “I do not exclude any majority as long as we cut costs for businesses and strengthen Europe’s competitiveness.” Anything less risks condemning the EU to further economic decline, as former European Central Bank President Mario Draghi pointed out last year.
President von der Leyen must rally her coalition behind a common goal. She herself deprioritised the Green Deal in the inaugural speech of her second mandate in favour of competitiveness, but time will tell whether she can deliver. And her time is running out. She has already faced three votes of no-confidence, and delivering on deregulation may be what salvages her precarious position.
It is time Brussels-Strasbourg acknowledges the failure of the Green Deal and confronts the growing unpopularity of further burdens on economic prosperity. It is time to stop refusing to see that outside the European Union, people no longer believe in the Green Deal, as confirmed by the recent U-turn by Canadian Prime Minister Mark Carey and the UK Conservative Party leader, Kemi Badenoch. Nowhere is this more apparent than in the recent success of the political Right in von der Leyen’s home country of Germany. Europeans are anxious about the economic state in their countries, and meaningful regulatory simplification could be the first sign that EU MEPs are taking this issue seriously.
A better path forward?
Endless debate and shifting compliance deadlines are simply an exercise in procrastination — Brussels will have to deal with the ramifications of their Green Deal at one point or another. In a letter dated October 6 and addressed to President Emmanuel Macron and Chancellor Friedrich Merz, the 46 CEOs who participated in the 2025 Franco-German Meeting in Evian called for the CS3D Directive to be fully abolished. This sends a clear and symbolic message to European and international companies that the governments of the member states and the Commission are committed to restoring Europe’s competitiveness. Clearly, this bureaucracy is merely exacerbating the decline in industrial competitiveness.
It is best we tackle this now, while we have a plan for deregulation at our fingertips, instead of waiting until businesses feel further pain and voters force a change. It is time to bring growth back to the EU, but that cannot happen until we end the era of overregulation.
As I have written previously, if the EU persists in its ideological climate policy, it risks becoming increasingly marginalised by countries which prioritise what really matters: reliable and affordable energy.
