Headlines
Wall Street regulator says it has concerns over European ESG rules
Published by Global Banking and Finance Review
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
SEC Chair Paul Atkins criticizes European ESG regulations, citing potential costs for U.S. companies and investors, and calls for reduced reporting obligations.
WASHINGTON (Reuters) -Wall Street's top regulator on Wednesday criticized two recent European laws on companies' disclosures of their environmental, social and governance impacts, underscoring the shift in U.S. financial regulation since President Donald Trump took office.
In an address to an event held in Paris by the Organization for Economic Cooperation and Development, Paul Atkins, chair of the U.S. Securities and Exchange Commission, said the laws could impose costs on investors and called on European authorities to focus on promoting free enterprise instead.
"I have significant concerns with the prescriptive nature of these laws and their burdens on U.S. companies, the costs of which are potentially passed on to American investors and customers," Atkins said, according to prepared remarks.
Though Atkins noted recent changes to ease the laws' burdens, he said more work was necessary, adding that Europe should focus on cutting firms' reporting obligations "rather than pursuing ends that are unrelated to the economic success of companies" or their shareholders.
The European Union last year adopted a law, the Corporate Sustainability Due Diligence Directive, requiring larger companies to verify whether their supply chains use forced labor or cause environmental damage, and to address this if they do.
However, this was watered down to win the support of some EU members.
Separately, the European Commission in February proposed looser environmental and corporate sustainability standards under the EU's corporate sustainability reporting directive, which requires companies to disclose information about their environmental and social impacts to investors and consumers.
(Reporting by Douglas Gillison in Washington; Editing by Sam Holmes)
Paul Atkins, chair of the U.S. Securities and Exchange Commission, expressed significant concerns regarding the prescriptive nature of the laws and their burdens on U.S. companies, which could lead to increased costs for American investors and customers.
The Corporate Sustainability Due Diligence Directive is a law adopted by the European Union that requires larger companies to verify whether their supply chains use forced labor or cause environmental harm.
In February, the European Commission proposed looser environmental and corporate sustainability standards under the EU's corporate sustainability reporting directive, which aims to ease the reporting obligations for companies.
Atkins suggested that Europe should focus on cutting firms' reporting obligations rather than pursuing ends that could impose additional burdens on U.S. companies.
Explore more articles in the Headlines category