Staff Reports
The European Union just passed a new rule that says businesses there have to follow ESG standards. This means they have to think about how what they do affects the environment, people, and how they are managed. But it’s not just for big companies from Europe – it’s for big and small companies all over the world, including in the United States.
This rule is not just for the businesses that make things. It also applies to the companies that give them the stuff they need, like Walmart getting toothpaste from Procter & Gamble. This rule is going to start in Europe in 2027 for companies with 5,000 people and about $1.63 billion in business.
Just adopted: the corporate sustainability due diligence directive ✅
Companies will need to identify and mitigate any adverse impact on human rights and the environment, with respect to:
?their own operations
?those of their subsidiaries
?those carried out by their partners— EU Council (@EUCouncil) May 24, 2024
But the next year, it will include companies with 3,000 people and $977 million, and then in 2029, it will apply to companies with 1,000 people and $488 million. This means that if a company in the United States does business in Europe, they have to listen to these new rules, too!
And it’s not just the companies that have to do this – the companies they get things from also have to follow the rules. The people who are not happy about this think it is a bad idea that could hurt the economy and the way people make decisions. They say the idea will make a small group of big companies and people from other countries be in control of what happens with making things and business.
Some people say the new rule about ESG could be a problem and make it hard for people to do business. They think that it is like applying their ideas on people in other countries through things like how things get made. They say it could hurt the way people and businesses work, and it could be dangerous for America and how safe it is.
Many people think this new rule will not be a good thing for the businesses that have to follow it. They are worried that it will take away how America and other countries make decisions. Some people don’t think the people in charge should be able to do this, and they think it will cause problems for people and businesses.
