Rep. Bernardi urges state to oppose EU corporate sustainability directive; committee hears trade and sovereignty concerns

Representative J.D. Bernardi introduced HCR 9, a concurrent resolution urging the U.S. government to reject compelled compliance by American companies with the European Union's Corporate Sustainability Due Diligence Directive (CSDDD). Bernardi said the directive — passed by the EU in July 2024 — requires large companies and their global supply chains to meet a laundry-list of environmental, social and governance (ESG) standards or face significant penalties and private litigation.

Bernardi outlined the directive's timeline: adoption in 2024, member-state transposition by mid-2026, and operational compliance beginning in 2027. He told the committee the law would sweep in firms with global group revenues above roughly €450 million, covering an estimated 1,000 U.S. companies and thousands of suppliers worldwide, and would expose noncompliant firms to fines of at least 5% of global turnover plus private litigation.

Committee members asked whether the resolution seeks to ban compliance or to instruct the federal government to negotiate; Bernardi said the measure asks the U.S. State Department and federal officials to resist extraterritorial enforcement by the EU and to protect American business sovereignty. Lawmakers discussed enforcement options such as tariffs or diplomatic pressure; witnesses did not testify in opposition during the hearing.

Why it matters: The resolution frames an international regulatory change as a U.S. sovereignty and trade issue and asks federal officials to weigh countermeasures to extraterritorial corporate regulation that could affect supply chains and prices.