Sustainability Risks and Requirements for Transatlantic Growth
As EU and US sustainability rules continue to evolve, transatlantic businesses face a fragmented and uncertain regulatory landscape, making adaptable governance and risk management increasingly important for growth.
As the United States and the European Union continue to debate the future of sustainability regulation, businesses with transatlantic operations must navigate the geopolitical uncertainty and fragmented compliance environment if they don’t want to lose momentum. For business leaders, strategic risk management accordingly represents both a business challenge and a business imperative for transatlantic investment and growth.
Perhaps most notably, governmental discussions surrounding the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) demonstrate how quickly sustainability requirements can become intertwined with trade policy and competitiveness. Since the 2025 U.S.-EU trade framework agreement (the Turnberry Agreement) was reached, the EU has implemented a series of simplification measures through its Omnibus reforms to CSRD and CS3D, removing thousands of companies from the scope of the directives. As Member State transposition of the amended directives moves forward and compliance deadlines approach, however, the U.S. Government remains concerned about the extraterritorial effect and non-tariff trade impacts of the directives, leaving continued uncertainty affecting companies.
For Irish companies seeking growth in the U.S. market, the regulatory environment related to sustainability may appear less prescriptive than in Europe. Federal ESG and sustainability initiatives have been slowed or reversed under the Trump Administration; yet, companies face an increasingly fragmented risk landscape in the U.S. This landscape includes a growing patchwork of diverging state-level requirements related to climate disclosures, extended producer responsibility (EPR) programs, green claims, product stewardship (e.g., PFAS restrictions), and more. New and emerging laws, like California’s EPR and climate disclosure laws, also face extensive lobbying campaigns and legal challenges regarding their validity. Different coalitions of state attorneys general prioritise specific enforcement areas, including consumer protection as it relates to sustainability initiatives from both the “pro-ESG” and “anti-ESG” perspectives. Scrutiny also comes in the form of litigation, including consumer class action lawsuits, which are often expensive and time-consuming for companies.
Accordingly, successfully navigating the risk landscape in the U.S. requires effective governance systems that can adapt across multiple jurisdictions, stay up to date on changing undercurrents, and navigate unique nuances of U.S. litigation and lobbying dynamics.
Eastward, for U.S. companies seeking growth in Ireland and the broader EU, a more centralised and mature sustainability framework awaits. Even with recent CSRD and CS3D simplification, other requirements remain (e.g., deforestation, carbon pricing, circular economy, and green claims) and increasingly operate as baseline conditions for doing business across the EU. Whether U.S. companies themselves have an EU presence, these requirements often reach them indirectly through customers, investors, lenders, distributors, suppliers, and other contractual counterparties, who require certain assurances or data to support their own compliance or voluntary initiatives.
Thresholds, timelines, and requirements may shift as the EU balances competitiveness and sustainability, but U.S. companies looking to expand in Europe should be prepared for a framework that requires credible evidence, reliable data, and accountable governance to support environmental commitments and disclosures. Ireland is therefore especially significant for U.S. businesses. As a familiar common-law, English-speaking gateway into the EU, transatlantic counselling through Ireland can help translate European sustainability expectations into operational, contractual, governance, and disclosure systems that U.S. management teams, boards, investors, regulators, and other stakeholders can understand and use.
As transatlantic political dynamics continue to evolve, regulatory complexity appears to now be a permanent feature of the business environment. Companies that proactively build adaptable governance structures, strengthen due diligence processes, and invest in regulatory preparedness will be best positioned to seize opportunities on both sides of the Atlantic, regardless of where the political pendulum swings next.
