New EU ESG Directive Targets American Firms With Foreign Climate Mandates

In the name of “sustainability” and “corporate responsibility,” policymakers in the European Union have launched one of the most dangerous attacks on American sovereignty and economic freedom in modern history. [emphasis, links added]

If left unchecked, their latest scheme, the Corporate Sustainability Due Diligence Directive (CSDDD), could decimate U.S. businesses, crush innovation, and impose radical environmental and social mandates on millions of American workers and consumers.

Fortunately, there is a solution making its way through Congress that could help put an end to this madness: the “PROTECT USA Act,” recently introduced by Tennessee Republican Senator Bill Hagerty.

If lawmakers are serious about defending our Constitution, our free-market system, and the American people from foreign tyranny disguised as climate activism, they must act now to support this important legislation.

A Foreign ESG Takeover

The CSDDD is, at its core, a power grab. Approved by the European Union in 2024, this radical law imposes sweeping environmental, social, and governance (ESG) mandates on any company, regardless of where it is headquartered, that does significant business in the European Union.

This includes many of America’s largest employers, from Apple and Amazon to Ford and McDonald’s.

Under the law, companies with revenues greater than €450 million from EU operations must meet rigid sustainability criteria.

…the law allows activists and third parties to launch lawsuits against companies for alleged non-compliance, opening the door to endless “lawfare”…

These requirements include curtailing land development, embracing vague social justice requirements, limiting water usage, reducing biodiversity loss, and transitioning to “green” energy, regardless of whether such a shift is economically viable.

Failure to comply could result in fines as high as 5% of a company’s total global revenue.

Even worse, the law allows activists and third parties to launch lawsuits against companies for alleged noncompliance, opening the door to endless “lawfare” designed to destroy nonconforming businesses.

But the danger doesn’t stop with large multinational corporations. The CSDDD requires covered companies to impose ESG rules on significant portions of their supply chains, regardless of where those smaller companies are located.

This means countless small and mid-sized U.S. manufacturers, truckers, farmers, and service providers will also be caught up in the CSDDD scheme.

While not every single supplier will fall under the directive’s reach, thousands of businesses will be pressured into compliance through contractual obligations tied to ESG benchmarks.

This is regulation without representation. And it’s unacceptable.

The PROTECT USA Act: A Shield For American Sovereignty

Senator Hagerty’s PROTECT USA Act — short for Prevent Regulatory Overreach from Turning Essential Companies into Targets Act — strikes at the heart of the European Union’s overreach.

The bill would prohibit entities “integral to the national interests of the United States” from complying with “any foreign sustainability due diligence regulation,” including the CSDDD.

The legislation defines the term, “entities integral to the national interests of the United States’’ broadly. These entities include “any partnership, corporation, limited 7 liability company, or other business entity” that does business with the federal government or works in a long list of key industries, such as fossil fuels and mining.

The bill also allows the president to designate companies or industries as “integral” to America’s national interests.

Crucially, the legislation also includes provisions that empower the president to “take any action the President determines is in the public interest to protect an entity integral to the national interests of the United States from an adverse action related to a foreign sustainability due diligence regulation.”

This means that if the European Union insists on attempting to penalize American companies for failing to adopt EU ESG policies that Congress never approved, the president would have the ability to fight back, economically and diplomatically.

The CSDDD requires covered companies to impose ESG rules on significant portions of their supply chains, regardless of where those smaller companies are located.

Further, the PROTECT USA Act would allow U.S. businesses and individuals to take legal action here at home if they are harmed by foreign ESG laws like the CSDDD.

American companies would not have to suffer silently under international regulations they had no say in crafting.

Instead, they’d have the power to challenge this overreach in court by bringing a civil action against parties that impose due diligence rules against them.

They could even win damages for the harm imposed on them.

Why This Bill Matters — Now More Than Ever

The CSDDD is set to be phased in by 2028, following a recent one-year delay approved by EU officials. That may seem far off, but the legal and economic machinery needed to enforce it is already in motion.

Companies are now reviewing contracts, overhauling compliance strategies, and — most disturbingly — developing strategies to pressure suppliers to preemptively adopt EU-aligned ESG policies.

If Congress waits too long, the damage will be irreversible. Smaller U.S. businesses will fold or be forced into ESG submission. Consumers will face higher prices and fewer choices.

And the American economy will become increasingly subservient to the whims of unaccountable Brussels bureaucrats and radical climate ideologues.

Support for the PROTECT USA Act should be a bipartisan no-brainer. This is not a debate about climate science or corporate ethics. It’s a question of who governs America — our elected representatives, or foreign institutions bent on advancing a globalist agenda?

Time To Draw The Line

We cannot allow the EU’s ESG regime to infect our legal system, cripple our industries and override our constitutional protections.

The CSDDD is a Trojan horse — an attempt to use multinational commerce as a backdoor to implement radical policy changes that would never survive the American legislative process.

Senator Hagerty deserves credit for stepping up and drawing a clear line in the sand. His PROTECT USA Act offers Congress a rare opportunity to reclaim control over our economy and reject global governance.

The stakes couldn’t be higher. If Congress fails to act now, we will all pay the price — not just in lost jobs and profits, but in lost liberty.

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