That’s one way to characterize the attitude of American companies and policymakers toward their European counterparts. Take, for example, the issue of disclosures by foreign insiders.
Foreign companies raising capital in the United States – known as foreign private issuers or FPIs – have long avoided the insider reporting requirements set forth in Section 16(a) of the Securities Exchange Act of 1934. However, federal lawmakers eliminated this exemption when they signed the so-called Holding Foreign Insiders Accountable Act into law. defense spending bill for the 2026 budget year, which President Donald J. Trump signed into law in December. The measure calls on directors and officers of FPIs to do so adhere to the same requirements as insiders at US issuers when it comes to reporting their holdings and transactions in shares of FPIs. (Notably, some informed observers would prefer to see the requirements extended to owners who control an equity stake of more than 10% of an FPI.)
Compare that position on insider reporting with the position of many US government officials on the European Union’s sustainability rules. In October, writes a coalition of sixteen attorneys general to executives of major US technology companies such as Microsoft and Google, asking them not to comply with the EU Directive on Corporate Sustainability Reporting and the Corporate Sustainability Due Diligence Directive. They warned that complying with EU reporting and due diligence requirements would subject the companies to potential lawsuits and government enforcement actions in the US.
Meanwhile, amid the EU’s crackdown on the tech sector, the White House is to use threats of retaliatory trade policies to pressure EU member states to roll back enforcement against US companies. According to the Office of the US Trade Representative, US service providers operating in the EU are subject to “discriminatory” actions, such as lawsuits and fines. Keep in mind that in August, representatives of the EU and US negotiated an agreement intended to minimize restrictions on trade and regulatory burdens resulting from the CSRD and CSDDD. Moreover, the US has joined Qatar in using trade and energy policies as leverage to push the EU to roll back the CSDDD.
That’s the paradox. Although the US opposes the EU’s sustainability rules, including burdensome climate disclosure rules, the country makes no bones about wanting more transparency in the financial reporting of foreign insiders. A new Intelligize report released today looks at the push and pull between different climate disclosure regimes.
The report, Diverging Rules: Climate Disclosure in a Fragmenting Regulatory Landscape, highlights an important compliance reality for public companies: even as climate disclosure obligations are scaled back at the federal level, they are becoming increasingly complex globally. Not to mention that American companies also have to comply with regulations in states like California. As a result, issuers increasingly must navigate a patchwork of complex (and sometimes overlapping) requirements.
The fragmentation creates new risks for American companies. Intelligize’s benchmarking shows that more risk factors are being disclosed in relation to the new EU climate disclosure rules. In other words, EU regulators are expanding their role as US demands evolve.
Read Intelligize’s new report to learn more about the divergent trajectories of climate disclosure regimes and how companies are responding to the associated risks.
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