Leaked Document Exposes Major Threat to EU's Push for Net-Zero Emissions as Member States Seek to Weaken Flagship Environmental Law

 A confidential document obtained by The Associated Press reveals that a flagship EU law aimed at pushing European companies towards achieving net-zero emissions is at risk of being significantly weakened by member states. The Corporate Sustainability Due Diligence Directive, which was designed to ensure companies eliminate environmental and human rights violations across all areas of their business, may no longer require firms to implement the goals of the Paris Agreement. The leaked document details a watered-down proposal that would exclude the entire financial sector from the legislation, despite banks and insurers being major contributors to global warming.

Nonprofits warn that the new proposal would only require companies to have plans to meet low carbon targets, rather than actually deliver on them, potentially leading to greenwashing. The European Parliament, which supports stronger legislation, is in a standoff with the Council of the European Union, composed of ministers from member countries, who want less burdensome provisions for their economies. The current presidency of the council, held by Spain, is attempting to find a compromise. Campaigners are concerned that if the inclusion of finance is delayed, it may never happen, particularly after the next European elections in 2024.

Environmentalists argue that finance is a major driver of change and excluding it would undermine the progress made and the views of the EU parliament, commission, and member states. France, in particular, has been identified as a driving factor behind the exclusion of the financial sector. The leaked document also reveals that the proposed changes would weaken the requirement for companies to adhere to the Paris Agreement, making the law weak and unenforceable.

The council's preferred version would only order companies to adopt a plan aligned with the agreement without necessarily delivering on it. Nonprofits warn that the EU presidency now prefers weaker regulation, and the proposed changes could be seen as a license to greenwash. The final negotiation between member countries and the European Parliament is yet to take place. Once a compromise is reached, the law will need approval from both the parliament and council to become binding across the EU.