Published: Saturday, October 14, 2023
Author: Michael Kraten, PhD, CPA
Today’s European Union (EU) began its existence in 1957 as the European Economic Community (EEC), i.e. a “community” of independent states. As early as 1946, though, Winston Churchill and others espoused the creation of a “United States of Europe.” And others described the goal of the EEC as the creation of a European Common Market.
Is our contemporary EU a true common market? Hardly. Consider, for instance, the sustainability reporting field.
On the one hand, the EU has adopted the Corporate Sustainability Reporting Directive (CSRD) as law. The CSRD’s “next generation” law, the Corporate Sustainability Due Diligence Directive (CSDD), is currently weaving its way through its state-by-state approval process. For these directives, the EU appears to be operating as a single cohesive entity.
But on the other hand, Germany has separately adopted its own “Act on Corporate Due Diligence in Supply Chains (Supply Chain Due Diligence Act)” as law. With or without the passing of the EU-wide CSDD, its requirements will likely endure as a permanent component of the German regulatory system.
The “somewhat cohesive and yet somewhat patchwork” nature of the European sustainability reporting system is actually not very dissimilar to the American system. California, for instance, recently approved mandatory corporate reporting of carbon emissions in advance of an impending Securities and Exchange Commission (SEC) decision about doing so on the federal level.
Thus, in the field of sustainability reporting, it would be a mistake to assume that the directives of the European Union or the regulations of the United States of America are actually “united.” Instead, the business, economic, and legal systems of these legal entities are as fragmented as the societies that they govern.
Originally published at michaelkraten.blogspot.com. All rights reserved by author.