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Wall Street Regulator Says It Has Concerns Over European ESG Rules
Published by Global Banking & Finance Review®
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
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SEC Chair Paul Atkins criticizes European ESG regulations, citing potential costs for U.S. companies and investors, and calls for reduced reporting obligations.
SEC Chair Raises Concerns Over European ESG Disclosure Regulations
Concerns Over European ESG Regulations
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.
Impact on U.S. Companies
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.
Details of European Laws
"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.
Corporate Sustainability Due Diligence Directive
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.
Corporate Sustainability Reporting Directive
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)
Key Takeaways
- •SEC Chair Paul Atkins criticizes European ESG laws.
- •Concerns about costs imposed on U.S. companies.
- •European laws focus on environmental and social impacts.
- •Corporate Sustainability Due Diligence Directive discussed.
- •EU's Corporate Sustainability Reporting Directive proposed.
Frequently Asked Questions about Wall Street regulator says it has concerns over European ESG rules
1What concerns did the U.S. SEC chair express about European ESG laws?
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.
2What is the Corporate Sustainability Due Diligence Directive?
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.
3How did the European Commission respond to concerns about sustainability standards?
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.
4What did Atkins suggest Europe should focus on regarding ESG regulations?
Atkins suggested that Europe should focus on cutting firms' reporting obligations rather than pursuing ends that could impose additional burdens on U.S. companies.
