Legislation was introduced in the House recently that would require the Securities and Exchange Commission (SEC) to study the impact that mandates from the European Union, especially those related to the environment, will have on the U.S. economy and companies.
The bill, the Protecting U.S. Business Sovereignty Act, was introduced in the House by U.S. Rep. Dan Meuser (R-PA). It seeks to protect American companies from overseas regulations on their U.S.-based operations. A follow up bill that includes an enforcement mechanism will be introduced after the study is completed, Meuser said.
The legislation comes in response to a legislative package from the European Commission called the Corporate Sustainability Due Diligence Directive (CS3D). The directive would require companies operating in the European Union to identify, disclose, and take steps to mitigate the “negative impact” of their activities on the environment, pollution, environmental degradation, and biodiversity loss.
Companies that are deemed non-compliant with the standards will be liable for damages and can be sanctioned by national supervisory authorities. Sanctions include “naming and shaming,” removing a company’s goods from the market, or fines of at least 5 percent of net worldwide turnover. Also, non-EU companies that don’t comply with the rules would be banned from public procurement in the EU.
“The SEC and the European Union have no jurisdiction in dictating carbon emission standards on U.S. companies. The U.S. is doing many things regarding fossil fuels, and in fact, we are the only industrialized country in the world to reduce carbon emissions in recent years. However, this bill isn’t about climate change, it’s about following the law and protecting the sovereignty of American businesses. The European Union should not have the authority to issue mandates on divisions of U.S. companies operating on American soil. The American-based operations of U.S. companies should be beholden to U.S. law and no other governing body,” Meuser said.