· 3 min read
illuminem summarises for you the essential news of the day. Read the full piece on Responsible Investor or enjoy below:
🗞️ Driving the news: On August 21, 2025, the EU and U.S. announced a Framework Agreement on reciprocal, fair, and balanced trade
• As part of this, they agreed to “exchange views” on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) and Deforestation Regulation (EUDR)
• Importantly, the European Commission reaffirmed that it would not grant U.S. companies "more favourable treatment" under the CSDDD or any EU regulation
🔭 The context: The CSDDD, adopted in mid‑2024, requires companies operating or trading in the EU to assess and mitigate human rights and environmental harms across their global value chains
• In parallel, the EUDR, effective from late 2024/early 2025, imposes strict deforestation-free sourcing requirements
• The Framework Agreement includes commitments to simplify compliance, reduce administrative burdens for businesses (especially SMEs), and engage in dialogue with U.S. stakeholders while maintaining EU rule integrity
🌍 Why it matters for the planet: This dialogue-oriented approach may help align transatlantic trade with sustainability objectives — but critics warn that easing burdens and decentralizing enforcement (e.g., removing harmonized liability) risks weakening the policy’s effectiveness
• The CSDDD and EUDR were conceived as stepping stones toward rigorous corporate accountability; dilution could undermine that progress
⏭️ What’s next: Negotiations on Omnibus legislative changes to the CSDDD and CSRD — including delaying implementation, raising thresholds, and modifying liability provisions — are ongoing, with resolutions expected in fall trilogue talks among the European Commission, Parliament, and Council
• Simultaneously, transatlantic discussions may pave the way for streamlined yet principled implementation mechanisms
💬 One quote: “Embedding commitments on CSDDD/CSRD in a trade deal could lock in deregulation for years, making it almost impossible to restore stronger sustainability standards in the future.”, warns Richard Gardiner, interim head of EU policy at ShareAction
📈 One stat: An estimated 5,400 EU companies and 900 international firms with significant EU business fall within the scope of the CSDDD — though ongoing proposals could sharply reduce these figures via threshold adjustments and narrowed scope
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