TotalEnergies, Siemens urge EU to abolish climate law, letter shows

TotalEnergies and Siemens, representing 46 European companies, have urged French President Emmanuel Macron and German Chancellor Friedrich Merz to abolish the EU's corporate sustainability due diligence directive, asserting that such a move would significantly boost European competitiveness. The directive, which mandates companies address human rights and environmental issues in their supply chains or face fines up to 5% of global turnover, is a politically contested law already subject to EU negotiations for simplification. This joint call by TotalEnergies and Siemens for complete abolition goes beyond the current legislative efforts to merely scale back the regulations.

Analysis

TotalEnergies (TTEF.PA) and Siemens (SIEGn.DE), representing 46 European companies, have urged French President Emmanuel Macron and German Chancellor Friedrich Merz to abolish the EU's corporate sustainability due diligence directive. This October 6 letter asserts that such a repeal would significantly boost European competitiveness.

The directive, adopted last year, mandates companies to address human rights and environmental issues within their supply chains, with non-compliance risking fines up to 5% of global turnover. This regulation has become a politically contested component of Europe's green agenda, prompting ongoing EU negotiations aimed at simplifying its provisions due to pushback from various nations and companies like Exxon Mobil (XOM.N).

The joint call by TotalEnergies and Siemens for complete abolition goes significantly further than current legislative efforts to merely scale back or exempt companies from the law. This intensified corporate advocacy highlights a growing industry desire for regulatory relief, potentially influencing the future trajectory of ESG policy and operational costs for European businesses.

Key Decisions for Investors

• Monitor the ongoing EU negotiations regarding the corporate sustainability due diligence directive for potential amendments or further pushback.
• Assess the supply chain exposure and current ESG compliance costs for European companies, particularly those in energy and industrial sectors, given the potential for regulatory changes.
• Evaluate the long-term implications of a potential regulatory rollback on corporate ESG commitments and the broader European competitiveness narrative.