"Comment: Why Europe must hold its nerve on raising the ESG bar for business," 4 February 2025

With the inauguration of President Donald Trump, and his agenda of narrow economic nationalism, Europe faces hard choices. The new U.S. president inevitably emboldens similar voices in Europe too. Together they stoke fears that Europe’s economies are uncompetitive and ossified, about to be run over by the “animal spirits” unleashed in the U.S. by blanket deregulation, arbitrary tariffs and convenient myopia on our ecological crisis.[...]

Commissioner Ursula von der Leyen made a serious concession to corporate lobbies in November with an “omnibus” package [...]

The new regulation, which is now denounced as a “bureaucratic burden” despite its emphasis on smart and focused action, is there to create trust that companies can be a force for not only profitability but also for good. If we now abandon these principles, we abandon them at our peril as public trust erodes.

It is vital to gain the trust of citizens and consumers that the products and services they buy do not originate from child labour or the reckless destruction of the environment. To dismantle laws, or even fall back on discredited voluntary guidelines, would be a betrayal of citizens’ legitimate expectations of governments to direct markets towards shared prosperity and the common good. Another element of trust is that companies have the right to expect legal certainty and predictability from lawmakers.[...]

The views of responsible companies that have called for mandatory rules instead of failing certifications should be heeded. A coalition of companies, including Unilever, Nestle and Mars state that opening the legislation could undermine investment.[...]

More than 150 business and human rights professionals wrote to the commission counselling against opening the primary legislation.[...] Similarly, 170 civil society organisations have appealed that “the EU should not undo the progress that has already been achieved”[...]

After years of an assertive Brussels Effect (in which many smart European standards have been adopted by business worldwide), it would signal a loss of confidence, leadership and direction. Thus the omnibus initiative, if pursued, needs to be confirmed as a limited effort to strengthen further the guidance for the excellent social and environmental regulations now enshrined in European legislation.