Skip to content
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
Insurance Journal - Property Casualty Industry News

Featured Stories

  • Lengthy Government Shutdown to Impact Insurers
  • FEMA, Customs and Border Protection Staff Data Stolen
  • Articles
  • Jobs
  • Markets

Current Magazine

current magazine
  • Read Online
  • Subscribe
  • Login
  • Front Page
    • National
    • International
    • Most Popular
    • Magazine
    • Forums
    • Blogs
    • Videos/Podcasts
    • Newsletters
  • News
    • Most Popular
    • National
    • International
    • East
    • Midwest
    • South Central
    • Southeast
    • West
  • Magazines
  • Research
  • Directories
  • Jobs
  • Features
    • Events
    • Forums
    • Market Directories
    • Quotes
    • Polls
    • Rankings & Awards
    • Insurance Giving Back
  • Subscribe

European Union Lawmakers Agree to Force Foreign Firms to Comply With ESG Rules

By Frances Schwartzkopff and John Ainger | March 23, 2022
Email This Subscribe to Newsletter
  • Article

European lawmakers have agreed to force roughly 28,000 foreign subsidiaries to comply with the bloc’s ESG rules, marking a blow to representatives for U.S. corporations who had lobbied for the opposite outcome.

In a wide-reaching revamp of the EU’s reporting requirements for non-financial firms, the bloc’s parliament has dropped a planned exemption that had been backed by the American Chamber of Commerce to the European Union, according to draft documents seen by Bloomberg. An announcement is expected on Wednesday, as part of a wider package of corporate reporting proposals.

Europe has been working for years to ensure its rules for environmental, social and governance standards become a global benchmark. The latest proposal means the local operations of giant corporations such as McDonald’s Corp. and General Motors Co. would all be required to live up to the same ESG reporting requirements as their European peers.

U.S. SEC Unveils Landmark Climate Change Risk Disclosure Rule

The plan put forward by EU lawmakers, which will now be negotiated with member states, seeks to make it impossible for foreign companies to gain any competitive advantage via less rigorous ESG standards, according to Pascal Durand, the lawmaker overseeing the introduction of the EU’s Corporate Sustainability Reporting Directive.

Allowing foreign companies to apply potentially laxer ESG standards “was politically impossible,” Durand, who represents the Renew Europe party in the EU parliament, told Bloomberg.

Europe’s proposed ESG rules for companies are “probably going quite far in terms of how much an EU law can export itself, or export its content, into the global economy,” said Mirjam Wolfrum, director of policy engagement for the European operations of CDP, a nonprofit voluntary environmental disclosure system.

But Wolfrum said it was a “welcome approach” because such regulations “could help get the attention of what is needed in terms of environmental reporting into the global economy.”

U.S. Climate Reporting

The development comes as the Securities and Exchange Commission sets its own ESG requirements for companies operating in the U.S. The SEC will require firms to provide detailed information on greenhouse gas emissions; corporations with big indirect carbon footprints will be expected to disclose so-called Scope 3 emissions, which is the broadest and most challenging gauge.

New ESG demands across jurisdictions are part of a global response to increasingly alarming reports from scientists that climate change is accelerating at a dangerous pace. The United Nations’ Intergovernmental Panel on Climate Change provided its bleakest assessment yet last month, and warned that the private sector isn’t doing enough to avert a climate catastrophe.

European lawmakers say they’re trying to redirect the flow of capital in ways that shield the environment and promote social justice. The EU’s toolbox is based on a so-called taxonomy, which is a multi-year undertaking that’s still finalizing rules intended to define sustainable businesses. Lawmakers in the bloc worry that they can’t rely on other jurisdictions to come up with adequate rules.

“The European Union is not the only power involved in drawing up new non-financial standards,” Durand said. But if others prevail, “then sustainable development would be defined by a non-European vision, making it more difficult for European values to be effectively taken into account.”

A key feature of Europe’s ESG rules that is largely absent in other parts of the world hinges on the concept of double-materiality, whereby a company takes into account not only the impact of the outside world on its business, but also the impact of the company on the outside world. That includes elements such as biodiversity and social and human rights, “which are values important for European policy makers,” Durand said.

The American Chamber of Commerce to the European Union has warned requiring subsidiaries to report risks creating a “misleading picture of a group’s sustainability profile.” It says that consolidated ESG reports, based on similar requirements set in home markets, are more comprehensive.

EU lawmakers behind the proposal cited what they referred to as “ample evidence” that stakeholders in the bloc aren’t getting the information they need to support sustainable investing. Much of the EU’s focus relies on disclosure, and the new directive will require companies to report how strategies and business models align with a climate-neutral economy, restore biodiversity and provide greater transparency around their supply chains and workers’ rights.

Photograph: European Union (EU) flags hang from flagpoles outside the Berlaymont in Brussels, Belgium, on Wednesday, Oct. 7, 2020. Photo credit: Geert Vanden Wijngaert/Bloomberg.

Copyright 2025 Bloomberg.

Topics Legislation Europe

Was this article valuable?

Thank you! Please tell us what we can do to improve this article.

Thank you! % of people found this article valuable. Please tell us what you liked about it.

Here are more articles you may enjoy.

More NC Outer Banks Homes Collapse into Surf as Hurricanes Stay Far Offshore
IBHS Study Shows Smaller Hail May Be More Damaging to Roofs Than Once Believed
AIG Promotes 3 to Lead North America Commercial as Bailey Retires
Update: Airbus, Air France Reject Blame Over AF447 Crash, After 16 Years

Written By Frances Schwartzkopff

More From Author

Written By John Ainger

More From Author

Interested in Legislation?

Get automatic alerts for this topic.

Email This Subscribe to Newsletter
  • Categories: International & Reinsurance NewsTopics: Climate Change, environmental social and governance (ESG) criteria, EU ESG rules, global warming, greenhouse gas emissions, Intergovernmental Panel on Climate Change (IPCC)
  • Have a hot lead? Email us at newsdesk@insurancejournal.com
More News
ALDOI to Hold Hearing on Planned ProAssurance Merger with FD Insurance
All Injured in Deadly NC Waterfront Bar Shooting Released from Hospital
Markets/Coverages: HSB Launches Cyber Risk Solution for SMEs in UK and Ireland
Charlie Javice Duped JPMorgan Out of $175 Million. The Bank Is Picking Up Her Legal Tab
More News Features

Read This Next

  • European Union Lawmakers Agree to Force Foreign Firms to Comply With ESG Rules
  • House Bill Aims to Combat Forum Shopping in Trucking Industry Lawsuits
  • Industry Reps Back Reauthorization of Federal Terrorism Backstop
  • Lawmakers Press FEMA on the Future of US Flood Insurance
  • Hurricane Katrina Impacts Then and Now

Insurance Jobs

  • Senior Insurance Agent (3+ Yrs P&C Exp | W-2 | Warm Leads | In-Office Only) Senior Insurance Agent (3+ Yrs P&C Exp | W-2 | Warm Leads | In-Office Only) - Westminster, CO
  • Claims Manager, Insurance & Risk Management - Queens, New York
  • Customer Service Agent – Personal Lines - Bethlehem, PA
  • Auto Good Hands Repair Network – Performance Consultant – Remote (MST/CST) - Remote?, IL
  • Licensed Inside Sales Representative (Remote – Home Based Work) - Wichita, KS
MyNewMarkets
  • How to Attract the Next Generation to Insurance
  • 5 Evolving Trends Shaping Architects and Engineers Coverage
  • Rethinking Assault & Battery Liability in Commercial Real Estate
  • From Golf Greens to Sausage Fests: The Wild World of Prize Insurance
  • As Schools Prepare to Pay Athletes, What Role Will Insurance Play?
Claims Journal
  • Jaguar Land Rover Bailout Shows Rising Cost of Cybercrime
  • Chobani Urges End to Dannon Parent's Cold-Brew Coffee Lawsuit
  • J&J Must Pay $966M After LA Jury Finds Company Liable In Talc Cancer Case
  • Toyota Recalling 394K Vehicles for Rearview Camera Issue, NHTSA Says
  • Vietnam Capital Flooded Again After Storm Matmo Sweeps In
Academy of Insurance education
  • October 9 Forward Into The Past: Certificates of Insurance, Additional Insureds, and Other Contractual Risk Transfer Issues
  • October 16 Auto Insurance: You Get What You Pay For
  • October 23 Gotchas That'll Getchya - Latest Policy Language That'll Get You Sued
  • October 30 Challenges in Agency Mergers – Reducing Staff Flight and Avoiding E&O Claims

Insurance News

  • News by Region
  • News by Topic
  • Yesterday

Site Search

Features

  • Insurance Markets Directory
  • Forums
  • A.M. Best Company Ratings
  • Industry Events
  • Agencies For Sale
  • Newswire
  • Insurance Jobs
  • Rankings & Awards

Connect with us

  • Email Newsletters
  • Magazine Subscriptions
  • For Your Website
  • RSS Feeds
  • Twitter
  • Facebook
  • LinkedIn
  • Do Not Sell My Info

Insurance Journal

  • Submit News
  • Advertise
  • Subscribe
  • Reprints
  • Link to Us
  • Contact Us

Wells Media Group Network

  • Insurance Journal
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
© 2025 by Wells Media Group, Inc. Privacy Policy | Terms & Conditions | Site Map