France, Germany Call to Scrap EU Sustainability Due Diligence Directive

French President Emmanuel Macron has joined German Chancellor Friedrich Merz in calling for the complete repeal of the European Union's Corporate Sustainability Due Diligence Directive (CSDDD), arguing that the law imposes excessive regulatory and compliance burdens on companies, thereby harming Europe's competitiveness globally. The directive, adopted in May 2024, requires companies to address environmental and human rights impacts within their value chains and exposes them to legal liabilities and potential class action lawsuits. Despite initial support, the CSDDD underwent significant dilution, including raising the employee threshold for companies subject to the rules, and its full implementation has been delayed to 2028 as part of the EU Commission's Omnibus Simplification Package. Macron framed the repeal as necessary to create a level playing field with competitors such as the U.S. and China, emphasizing the need to simplify rules and boost business investment in Europe. The calls to scrap the CSDDD reflect a broader political pushback against the EU Green Deal and sustainability regulations, which has influenced recent European Parliament elections and policy negotiations. Meanwhile, Macron highlighted France's success in attracting foreign investment, linking regulatory reform efforts to enhancing economic competitiveness.