Smart Law for the Ecoogical Transition

International tensions, the impact of the Covid-19 crisis on budgets and Donald Trump’s return to the White House have disrupted Europe’s standard- and regulation-based strategy for transitioning to an economy with a social and environmental conscience. The European Union (EU) has spent several years working to put in place two directives: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). The first of these aims to regulate and strengthen transparency by ensuring businesses take responsibility for their environmental, social and governance impacts. In particular, they are required to produce a double materiality assessment within their non-financial reporting, disclose climate risks and supply data on their social and governance impacts. The second directive aims to lay down a transparent framework that will require large companies to put in place measures to identify, quantify, suspend, prevent and mitigate the negative impacts of their activities on human rights and the environment across their operations, value chains and subsidiaries. However, Ursula von der Leyen, the President of the European Commission, back peddled in the face of global competition and pressure from businesses and public opinion and plans to publish an omnibus package in February 2025. It will aim to simplify or even cancel the CSRD’s reporting obligations and potentially postpone the CS3D until it has been simplified. The Commission’s aim is to boost European competitiveness.