The US is second only to Germany in having the largest number of corporate groups subject to the EU’s new laws on human rights and environmental due diligence.

Figures from SOMO, a campaign body, shows that there are 1,447 groups globally subject to the controversial Corporate Sustainability Due Diligence Directive (CSDDD), with Germany home to 280 groups needing to comply.

France is home to the next largest European number of groups at 153, but that is smaller than the US, whose 182 groups include, for example, Ford, Mondelēz and Pfizer. The UK has 70 groups caught by the legislation.

The CSDDD has proved highly controversial in the US, where business interest bodies argue the law—which requires companies to report on human rights and environmental abuses in their supply chains—is “egregious”.

A ‘group’ refers to a group of companies, headed by a parent company, that function under one operational umbrella and have a single source of control.

The CSDDD was recently revised to ensure it touches many fewer companies, but there was no change to its extra-territorial effect.

Global value chains

David Ollivier de Leth, a researcher at SOMO, writes about its latest figures: “Despite the narrowing of the CSDDD thresholds, the law still covers the largest corporations in the EU economy that generally play an important role in global value chains.

“The CSDDD also still covers some of the world’s largest polluting companies, including those in the fossil fuel sector.”

The CSDDD applies to EU companies with global revenues of €1.5 billion or more. Its extra-territorial application catches non-EU companies with turnover of €1.5 billiion inside Europe.

There were critics of last year’s omnibus review of the CSDDD. The European Coalition for Corporate Justice said it had been “severely weakened by last-minute, deregulatory amendments” that had the effect of “slashing key human rights and environmental protections and gutting climate obligations”.

In the run up to finalising the changes, the CSDDD proved highly controversial in the US. US Treasury secretary Scott Bessent was petitioned by a party including the US Chamber of Commerce, which said: “The US should not permit the EU to export its own self-imposed regulatory burdens to help shore up its own competitiveness. We should be a model for other nations’ systems, not a target.”

‘Threatens American competitiveness’

In another note, the Chamber wrote that the CSDDD “intrudes on US regulatory authority and threatens American competitiveness”.

The SOMO figures show the Netherlands and Spain have broadly the same number of groups caught by CSDDD as the UK. Italy, meanwhile, has a larger number, at 85.

The total number of EU groups caught by CSDDD is now 974, or 29% of the original number in scope when the initial version of the legislation was adopted.

The CSDDD was reviewed, along with sister legislation the Corporate Sustainability Reporting Directive (CSRD), after former European Central Bank president Mario Draghi published a report saying the reporting rules were a “major source of regulatory burden”.

Outside the EU, and after the US and UK, Switzerland has the biggest group subject to the new rules at 47. Russia and China both have 13 groups now required to report according to the new rules.