‘Lack of spine’: France under fire for considering ‘Trump-inspired’ U-turn on environmental rules

Energy consultants are criticising the Macron government following reports that France may seek to kill EU legislation that makes companies reckon with their environmental impact. 

Companies in the Environmental Social and Governance (ESG) sector fear the Corporate Sustainability Reporting Directive (CSRD) could be washed away after Trump’s return in the US.

The CSRD requires companies in Europe to produce reports on their environmental and social impacts, including emissions, to ensure they comply with EU rules. Meanwhile the Corporate Sustainability Due Diligence Directive (CS3D) holds companies liable for human and environmental rights violations in their supply chains. 

Both directives were initially introduced in late 2023, but they have not yet been adopted in all countries, with Germany and several Eastern European countries fearful about their impact on their industries ability to compete. 

Currently, the EU is working on an ‘Omnibus simplification package’ to simplify and streamline the directives for the benefit of affected businesses.

But there are concerns it could junk the sustainability legislation entirely when Stephane Sejourne, executive vice-president of the EU and former French foreign minister, unveils the package on 26 February. 

Is France really looking to scrap the corporate sustainability rules?

Sejourne, a close ally of Macron, caused companies in the ESG space - such as green tech firms, funds that invest according to ESG principles and environmental consultancies - to worry when he told French media to expect a “complete deletion of [CSRD and CS3D] reporting” from the Omnibus package. 

A source close to Sejourne told Euronews that the “confusion” stemmed from a translation error. When Sejourne used the French word “suppression”, it was translated as “deletion” rather than “modification” which the source claimed was what was intended by Sejourne’s remarks. 

Meanwhile Politico reports that others in Macron’s camp are less sure that France, which has already implemented the directives in Omnibus, intends to keep them. 

Macron himself called for a break on regulation arguing that Europe must “regain [its] ability to compete.” And Politico revealed a document dated 20 January which suggests that France is pushing to delay the implementation of CSRD and CS3D. 

Alexis Normand, CEO of Greenly, a carbon accounting firm, told Euronews that some changes to CSRD and CS3D are needed. 

There are no industry-specific guidelines for which of the over 1,000 reporting points in the CSRD need to be taken into account by a given company. That means companies make that judgement themselves and then it is checked by auditors. 

Normand says companies can get “a bit swindled by the auditors who would say everything is ‘material’ because they are paid by the hour and companies can end up paying a tonne”. 

Normand estimates that publishing industry-standard guidelines and removing the need for auditors in the process could save companies around 80 per cent of the cost and make it easier to implement CSRD.

 “Why is this approach [better] versus if you scrap the whole thing? Well if you scrap the whole thing what you are really doing is scrapping climate ambition. And that is toxic”. 

The Trumpist turn in Europe

Stephane His, an independent energy consultant and director of Renewable Energy for All wrote in La Croix last month that “Trumpism is already penetrating European environmental politics”. 

He tells Euronews that the push for Europe to abandon its ESG legislation was part of a “wave” of “regression” on climate policies that began before Trump. 

“It affected the finance sector, the agriculture sector (calling organic into question), the automobile sector (calling the electric car into question) and now renewable energies,” he says. 

“It is because there has been progress in the ecological transition that has threatened established interests that the resistance has grown stronger. This is all the more reason not to turn back”. 

The US has been particularly resistant to CSRD and CS3D regulation which would make them comply with legislation in Europe that has no serious equivalent in America. 

Howard Lutnick, Trump’s Commerce Secretary, singled out CS3D as a threat to American industry and the US economy in a speech earlier this month. 

“US exports of natural gas are keeping the heat on in Europe this winter because the regulatory structure there has caused companies to flee,” Lutnick claimed. “Yet the EU is attempting to harm the competitive advantages of US companies by forcing them to comply with CS3D.”

In late January, the Guardian and Desmog revealed that the Heartland Institute, a climate change denial think tank with links to the Trump administration, has been coordinating a network of far-right MEPs to oppose the CSRD and CS3D legislation. 

Heartland has a record of extreme positions on environmental issues, comparing those who believe in global warming to the Unabomber in one infamous billboard. 

France’s ESG U-turn

For Normand, who is based in Paris, the worry is that the Macronists - who are domestically allying with the far right to prop up the Bayrou government - will push for an alliance between the centre right in the Renew grouping and the EPP and the far-right groups to kill the legislation.

“The thing that is very surprising is that it’s France who pushed for CSRD the most and now France has basically aligned itself with the German position who are pushing back because they represent the car companies and the Mittelstand [medium-sized manufacturing companies in Germany]. 

“So what took everyone by surprise was the lack of spine of the French authorities on this. So they were basically saying the opposite 6 months ago.” 

The source close to Sejourne insisted that any such fears were the result of a misunderstanding. However, they stressed that they could not comment on the contents of Omnibus legislation until it was published. 

An anonymous lobbyist told Politico that the Macron government had heard the arguments for delay or rejection of the legislation from industry and aligned itself with them, leaving the lobbyists “positively surprised”. 

While lobbyists are pleased, civil society organisations, trade unions and members of Macron’s own coalition are up in arms at the government’s moves. 

The European Coalition for Corporate Justice has coordinated a letter from 160 NGOs and trade unions criticising the potential rollback of the legislation. Meanwhile Clement Beaune, Macron’s Europe minister during the French EU presidency, slammed the signalling towards rollback of CSRD as “light Trumpism”.