The Tragedy of the Tragedy of the Horizon
Ten years after Mark Carney’s landmark speech reframed climate change as a systemic financial risk, the disclosure-led strategy he championed transformed market information but failed to drive real-economy change. As entrenched interests push green agendas to the sidelines and sustainability reporting itself comes under attack, closing the “virtuous circle” Carney envisaged, in which better information would drive investment, policy, and innovation, will require policymakers not only to preserve disclosures but also to design and deliver substantive reforms that accelerate the transition to low-carbon, resilient economies.
Ten years ago, on 29 September 2015, Bank of England Governor Mark Carney delivered his celebrated “(Breaking the) Tragedy of the Horizon” speech (Carney, 2015). Delivered at a time when Carney was also Chair of the Financial Stability Board (FSB), the body tasked with safeguarding the resilience of the global financial system, the speech marked a turning point in how central bankers and regulators approached climate change: no longer as an abstract environmental concern but as a systemic risk.
Credit is due, first to the foresight behind that speech and, above all, to the catalytic leadership displayed by the Financial Stability Board and Mr Carney. In that address, he supported the creation of an industry-led group on climate disclosure, a proposal that would materialise in the momentous decision by the FSB to establish the Task Force on Climate-related Financial Disclosures (TCFD). The remarkable work of the TCFD, embodied in its 2017 recommendations and subsequent guidance, defined a global benchmark for voluntary disclosure of climate-related risks, costs, and opportunities, and inspired the development of mandatory reporting regimes around the world
Carney explained to an audience of insurers how climate-related risks would not only materialise through mounting insurance losses from the realisation of physical risks (from more frequent and severe weather events or gradual changes such as sea-level rise) and liability risks (for example, arising from legal claims over climate-related harm), but also through the repricing of assets held on balance sheets, as markets incorporate physical, liability, and transition risks into valuations. Transition risks, he explained, would arise primarily from policy changes, for example on carbon pricing or performance standards, and from technological shifts.
He warned that the “tragedy of the horizon” lay in the mismatch between the long timescales over which climate impacts unfold and the much shorter temporal frames for analysis, decision, and accountability within which those most able to act operate. Prudential authorities, i.e., financial-stability regulators and supervisors, think in terms of the credit cycle at best, politicians remain constrained by the electoral or five-year plan cycle, and corporate management often passes for long-term when planning around the business cycle. By the time climate change enters those frames, he cautioned, it may already be too late to avert catastrophe.
To “break” that tragedy, Carney proposed a response centred on disclosure. Better information, he argued, could start a positive feedback loop: investors pricing risks before they crystallised, policymakers being encouraged to support the transition more boldly, and innovators and businesses accelerating the development of new technologies and business models.[1]
The TCFD and the voluntary and mandatory reporting schemes it inspired transformed climate-related information, not only by vastly increasing its availability but also by extending its scope and improving its consistency and comparability.
But as we mark the anniversary of Carney’s address, we must confront an uncomfortable reality and apparent paradox: while the push for standardised disclosures delivered major advances in information, climate action over the past decade has been catastrophically insufficient. And the very emphasis on disclosure, both in Carney’s speech and in subsequent policy, is part of the reason why.
Carney never claimed that disclosure alone would solve the problem. He was explicit that better information could only catalyse change if combined with credible policy responses from governments and technological breakthroughs from the private sector. Yet the virtuous circle he envisioned never materialised. Governments largely confined themselves to legislating disclosure regimes—often targeting financial market participants before the real economy—while failing to match transition rhetoric with clear and stable policy signals. Fossil-fuel subsidies, both direct and implicit, remain pervasive. Carbon-pricing coverage has expanded but remains incomplete and inconsistent, and prevailing prices fall far short of the levels required to shift behaviour. Efficiency standards, industrial strategies, and infrastructure investment have advanced too slowly to reshape incentives at scale.
The progress achieved over the past decade, namely a relative decoupling in which greenhouse gas emissions have grown more slowly than economic output, owes more to technological development than to policy signals or disclosure frameworks. Efficiency gains have done the heavy lifting in slowing emissions growth, and mostly without the help of government incentives. Grid decarbonisation has contributed more modestly, spurred by steep declines in the cost of renewables and, in some jurisdictions, by supportive policies.
Yet what began as an effort to accelerate the transition increasingly served to defer it. The transparency that was meant to catalyse action became a substitute for it. Tragically, disclosure became the horizon of political and regulatory intervention.
Part of the appeal of this disclosure-first, and, in some jurisdictions, effectively disclosure-only, approach lay in what might be called a convenient belief, echoing the supply-side economics explicitly espoused by Carney in his speech, that better information would itself prompt capital markets to adjust: pricing risk in, redirecting investment toward the transition, and ultimately altering the climate trajectory – thereby reducing the need for, or at least easing, substantive policy intervention.[2]
This leap of supply-side faith spared policymakers from having to confront established economic, fiscal, and social equilibria that together underpin the carbon order.
Phasing out fossil-fuel subsidies and raising carbon prices would have disrupted economies still dominated by fossil fuels for energy, with far-reaching effects on rent distribution, employment, and consumption structures. Mobilising large-scale public investment to transform the production and consumption infrastructure would have challenged public budgets already constrained by structural deficits driven by the decision to decouple tax revenues and government expenditures, and further strained by the legacy of the financial crisis and, later, the pandemic. Finally, exploring behavioural change would have required questioning the carbon-intensive lifestyles[3] of those segments of the population that concentrate economic, social, and political power. This reliance on disclosure as a substitute for action carried political costs of its own. Disclosure obligations expanded rapidly over the period, especially in Europe, but substantive climate action failed to follow. Having become the horizon of climate ambition, disclosure could just as well be denounced as a symbol of regulatory overreach and political futility, leaving disclosure regimes, and the climate agenda they were meant to serve, vulnerable to backlash.
As investor-led climate initiatives gained visibility in 2020 and regulatory responses accelerated in 2021, disclosure pressure began to threaten entrenched fossil-linked interests, prompting groups defending the status quo to mount a powerful counterattack.[4] With few clear transition winners yet emerging or identified, precisely because of a lack of substantive action and strong policy signals, the balance of power remained firmly on the side of the incumbents. Overt and covert lobbying, the purchase of political influence, the funding of disinformation campaigns, and the threat of strategic litigation cowed regulators, prompting them to weaken draft measures and, more recently, to postpone, rescope, or simplify newly adopted texts.[5]
In March 2024, after three years of work, the United States Securities and Exchange Commission (SEC) published its long-awaited climate disclosure rule, having pre-emptively removed the most controversial provisions in an effort to stave off opposition and improve its chances of surviving legal challenge. Less than a month after promulgation, the rule was put on hold pending litigation. Within a year, under its new Republican majority, the SEC announced that it would not defend the rule in court.
In the European Union, the European Commission issued in July 2023 a first set of European Sustainability Reporting Standards (ESRS) for corporate sustainability disclosures that went far beyond the drastic simplifications proposed by its expert group on an overinflated April 2022 draft.[6] The resulting standards were so pared down that mandatory disclosures became insufficient to provide institutional investors with the data they require to comply with their own sustainability reporting obligations. Under pressure from sectoral lobbies and business federations, powerful member states, and United States bullying, the Commission is now vying with the new European Parliament to further narrow the scope of corporate sustainability disclosures, invoking “burden-reduction” and competitiveness arguments that have gained traction partly because of disclosure overreach.[7]
These sustained assaults have not only stalled progress but are now fuelling regression and shifting the ideological and geopolitical battle lines, from debates over the essence of sustainability reporting to a direct challenge to its very existence.
Until recently, the contest was over the scope and purpose of reporting, pitting narrow conceptions focused on financial materiality and corporate risk against broader frameworks recognising corporate impacts on the environment and society.
On that front, the European Union championed a “double materiality” approach, combining the outside-in (financial) perspective focused on the risks, costs, and opportunities that climate change poses to the reporting entity, with the inside-out (impact) perspective considering the reporting entity’s contribution to climate change.
Incorporating both financial materiality and impact materiality, this stakeholder model has been opposed overtly by the International Sustainability Standards Board (ISSB), which upholds an investor model based on single materiality. As an emanation of the International Financial Reporting Standards (IFRS) Foundation, the leading independent body for global financial reporting, the ISSB aims to develop a baseline of sustainability disclosures grounded in financial materiality, starting with climate, that can be adopted by domestic regulators worldwide.
Vying for global influence, the ISSB lobbied to get the EU to adopt its single, financial-materiality focus, even fielding its well-connected Chair to undermine impact materiality through high-profile public commentary that critics, including this author, have described as conceptually weak and misleading rather than grounded in rigorous argument (Ducoulombier, 2023a).
Business federations and groups closely linked to fossil fuel value chains and their political appointees, both within the EU and from across the Atlantic, aligned with the ISSB and amplified narratives portraying impact reporting as an unnecessary burden, a threat to competitiveness, or an impediment to trade.
Under that pressure, the European Commission engineered a dramatic reduction in the bloc’s sustainability disclosure requirements but nevertheless reaffirmed its attachment to double materiality, suggesting that political resolve, while fragile, persisted. As political headwinds intensify, the Commission now champions further retreat, packaging it as competitiveness-boosting administrative relief. In this new environment, the ISSB has shifted tactics, calling on the bloc to adopt its standards as a core baseline and to keep impact materiality as a regional add-on.
Meanwhile, some of the ISSB’s erstwhile allies in the campaign against double materiality, emboldened by their successes, have gone further, calling for the outright dismantling of sustainability reporting itself. The ISSB, in turn, has become a target. The Chair of the U.S. Securities and Exchange Commission has warned that the United States could reconsider its decision to allow foreign companies to file financial statements prepared under IFRS without reconciling them to U.S. accounting principles, citing purported concerns over the IFRS Foundation’s ability to fund both financial reporting and sustainability standard-setting. Faced with such a threat to the currency of the IFRS framework as a global accounting standard, the IFRS Foundation could be tempted to deprioritise the work of ISSB or compromise on that body’s independence. Either way, the global appeal of the body entrusted as steward of the TCFD recommendations would be at risk, if not its very existence.
The attack on sustainability disclosures has thus moved beyond the conceptual and institutional arena. What began as an ideological struggle over reporting principles has morphed into a systematic effort to weaken, delay, or dismantle the very regulatory architecture those standards were meant to inform.
The successful backlash against sustainability disclosure has become a lever for a broader offensive, one targeting not only transparency but also the mechanisms of accountability and transition.
In the United States, recent measures have not only reduced the incentives[8] but also the ability of investors and financial institutions to integrate sustainability considerations into risk management,[9] investment,[10] and stewardship.[11] Federal agencies, meanwhile, have been loosening pollution standards and dismantling key environmental monitoring and disclosure frameworks,[12] signalling comfort with a reversal of environmental performance unhinged by transparency. The administration has also signalled receptiveness to calls for shielding fossil-fuel companies from climate-related litigation, a move that would further erode corporate accountability for environmental impact and weaken the financial justification for climate stewardship by investors.
In the European Union, the deregulatory drive has been marketed as a technical exercise to streamline EU law to reduce administrative burdens and foster competitiveness. As in the United States, the pushback campaigns have expanded beyond stemming the progress of disclosure[13] to target Europe’s draft substantive climate measures, including requirements for corporate transition plans, deforestation-free supply chains, and the reduction of methane emissions in the energy sector. Lobbying efforts have also successfully targeted the draft Corporate Sustainability Due Diligence Directive by narrowing its scope below what would be required for compliance with reference UN human rights frameworks[14] and doing away with its uniform liability regime. Given this momentum, the next rounds of “simplification” under the rolling Omnibus Simplification Package[15] could likely include outright regulatory rollbacks.[16][17]
With the climate tragedy unfolding under our very own eyes and transparency, accountability, and substantive climate action under siege, the question becomes how to restore a horizon for transformative climate action.
Paradoxically, the existential threats now facing sustainability disclosures and climate action arise just as the very tools needed to confront the challenges Carney identified reach maturity.
Stress testing and scenario analysis, which have become central to the prudential response Carney helped to inspire, are now far more sophisticated. They now allow central banks and supervisors to assess the resilience of financial institutions to climate shocks, and to explore how different policy or technology pathways could affect asset valuations and credit risks over time.
A new generation of probabilistic climate scenarios, assigning likelihoods to alternative transition and physical risk pathways, now enables more credible pricing of climate risks across asset classes and more realistic assessments of the costs of delayed action.
Yet, just as these advances make it technically feasible to integrate climate risks into financial decision-making, the continuity of the very data on which they depend, from corporate disclosures to the satellite observations underpinning weather and climate models, has become uncertain.
Without reliable, high-resolution data, even the best analytical models risk falling short of their full promise. The coming decade must therefore become the decade of action.
Carney’s speech ended with the claim that “better information” could form the foundation of a virtuous circle, enabling better understanding of tomorrow’s risks, better pricing by investors, better decisions by policymakers, and a smoother transition to a low-carbon economy.
Better measurement can indeed lead to better management, but only if the right incentives and policies are in place.
If the next decade is to look different from the last, we must preserve and strengthen sustainability reporting rather than dismantle it. We must continue to invest in research, development and innovation to improve climate-aware risk management and asset pricing.
But breaking the tragedy of the horizon will require more than better information and models. It will require decisive action to alter incentives and to redirect production and consumption.
Regulators must adjust the prudential and supervisory environments of financial institutions so that they are incentivised to manage climate risks and finance transition and adaptation, rather than being penalised for doing so. Above all, governments must deliver clear, credible and durable policy signals to the real economy, through regulation, taxation, public spending and investment, to complete the virtuous circle Carney envisaged. Without such choices, neither markets nor societies will achieve the speed and scale of transition that the climate crisis demands.
Cited work
Footnotes
[1] Carney’s Tragedy of the Horizon speech drew on work undertaken both within the Bank of England (notably its Prudential Regulation Authority September 2015 report titled The Impact of Climate Change on the UK Insurance Sector) and within the Financial Stability Board, where members had begun to explore the implications of climate change for financial stability, following an April 2015 request by the G20 Finance Ministers and Central Bank Governors that the FSB review how the financial sector could take account of climate-related issues. Archival material shared by insider Jean Boissinot after this note was written gives us insights into how Carney synthesised these two strands. The material includes the French non-paper that framed the first FSB workshop on climate change, to which Carney alludes in his speech. According to Boissinot’s account, the document, titled The Transition toward a Low Carbon Economy: The Role of the Financial System, was prepared by the French Ministry of Finance (Direction générale du Trésor) in the run-up to the meetings (COP 21), which would produce the Paris Agreement. Interestingly, that document gave primacy to mobilising capital for green investment, stressing that this would require changes in the policy and regulatory framework, while assigning disclosure and risk awareness a supporting role, to accompany and complement, not substitute for, structural reform. Carney’s speech, delivered five days after the workshop, effectively collapsed the two pillars of the approach described by the French into a single, disclosure-centred “virtuous circle,” recasting transparency from a complementary policy tool into the central mechanism of the emerging financial-sector conception of climate finance (a term hat had previously been used mainly to refer to financial flows supporting mitigation and adaptation by countries, especially in development contexts).
[2] In his speech, Carney explicitly invoked Say’s Law (i.e., the assumption that supply creates its own demand, as formulated by French economist Jean-Baptiste Say in the early nineteenth century) and projected it onto information, arguing that the creation of climate-related financial disclosures could generate its own demand for climate action.
[3] Cross-country and within-country disparities in household carbon footprints were already striking in 2010, the latest year for which comprehensive, peer-reviewed multi-regional input–output data with household-expenditure detail are available. The global top decile by expenditure had a footprint roughly ten times larger than that of the bottom half of humanity, and household emissions varied more than twentyfold between high- and low-income countries. Even in developed economies with comparable living standards, disparities across households remained pronounced. For illustration, in the European Union, the top decile of emitters was responsible for as much of household emissions as the bottom half, with mobility a distinctive contributor (Ivanova and Wood, 2020). Decarbonising household demand will therefore require addressing high-emission consumption categories—notably air and land transport and diet—and re-examining the cultural norms that sustain aspirational, carbon-intensive lifestyles (Ducoulombier, 2025b).
[4] The initial pressure for climate-related disclosure was asset-owner-led, as large institutional investors began measuring and disclosing portfolio footprints and committing to decarbonisation ahead of the Paris Agreement. Having pressed for decision-useful sustainability disclosures by corporates, these investors naturally endorsed the recommendations of the TCFD. In 2019, two institutional-investor-led initiatives were launched to translate net-zero commitments into portfolio-construction and corporate-engagement practices and to develop net-zero investment frameworks which would be completed early in 2021 (Ducoulombier, 2021). Asset managers soon followed, with BlackRock taking the lead in the United States. In its 2020 annual letters to CEOs and clients, BlackRock signalled that sustainability would become its “new standard for investing,” announced divestment from thermal coal, and demanded TCFD-aligned corporate disclosures. The firm reaffirmed this stance in January 2021 by placing net-zero alignment at the centre of its investment and stewardship strategy, in line with the freshly created Net Zero Asset Managers initiative (NZAM), which it would shortly join. These investor actions amplified disclosure and transition pressure across capital markets and contributed to a sense of urgency among regulators, while alarming fossil-fuel interests and their political allies.
During his 2020 campaign, Joe Biden pledged to make climate-risk disclosure a “day-one” priority of his administration. The designation of a long-time advocate of climate disclosure as Acting SEC Chair in January 2021 signalled that mandatory corporate climate-risk reporting might soon become a federal mandate.
Meanwhile in Europe, preparatory work on the Corporate Sustainability Reporting Directive (CSRD) was beginning just as the Sustainable Finance Disclosure Regulation (SFDR) was being finalised. The application of the SFDR from June 2021 further increased disclosure pressure on corporates, as investor compliance required the sourcing of sustainability data about investee companies.
[5] The counteroffensive initially targeted asset managers. In the first weeks of 2021, Texas lawmakers began discussing a bill denouncing financial institutions that considered climate risk as “boycotting” fossil-fuel companies and proposing to bar state pension funds and treasuries from doing business with such firms. In February 2021, coal lobbyists provided West Virginia lawmakers with a draft anti-ESG bill that was subsequently introduced, describing the effort as part of a multi-state initiative. By mid-2021, coordination of this “energy discrimination” campaign was being formalised through the State Financial Officers Foundation (SFOF) and the American Legislative Exchange Council (ALEC), which produced model bills that would inspire a wave of state-level anti-ESG laws. In parallel, climate-risk integration was reframed for the culture wars as “woke investing”, a racist dog whistle. Following BlackRock’s vote with investors demanding a credible low-carbon transition strategy at ExxonMobil in May 2021, political attacks on the company and its CEO multiplied, as did online campaigns mobilising conspiracy theories and antisemitic tropes (Ducoulombier, 2024). While strident denunciations of sustainable investing failed to capture broad public interest, the threats of blacklisting and resulting loss of Republican-state business, the administrative and legal costs of hearings and subpoenas, the risks of antitrust-themed litigation targeting investor coordination, and the reputational damage from relentless vilification proved highly effective in chilling voluntary climate initiatives by financial institutions, which were cowed into toning down public support for sustainability and leaving coalitions. The second ascent of Donald Trump to the presidency would enable a policy reversal on disclosure and climate-risk integration and the curtailment of institutional investors’ ability to engage with companies on sustainability issues. Europe never witnessed a coordinated offensive against institutional investors. What it experienced instead was a wave of climate denialist and delayist disinformation aimed at sustainability regulation and climate solutions. Europe did not witness a comparable offensive against institutional investors. Instead, it experienced a wave of climate-denialist and delayist disinformation directed at sustainability regulation and climate solutions, and relayed by right-wing populist politicians, with Nigel Farage, a once-retired politician and a recipient of substantial donations from fossil-fuel-linked interests, among the early recruits (Ducoulombier, 2023). Confronted with the rise of populist movements and under pressure from industry lobbies, several European governments have since moved to slow or dilute climate action, both domestically and internationally.
[6] The European Financial Reporting Advisory Group (EFRAG) was tasked with drafting the European Sustainability Reporting Standards (ESRS) operationalising the Corporate Sustainability Reporting Directive (CSRD). EFRAG began work even before its formal appointment following the adoption of the CSRD in April 2021. Its Exposure Draft of April 2022 drew criticism for indicator inflation, excessive prescriptiveness, lack of proportionality to corporate circumstances, an unclear articulation of materiality, and limited alignment with existing standards. A revised version, integrating feedback and insights from extensive multi-stakeholder consultations, was submitted to the European Commission in November 2022, with streamlined disclosure requirements, a clearer materiality process, and improved interoperability with global frameworks. The Commission’s July 2023 delegated regulation broadly followed EFRAG’s structure but dispensed with the unconditional disclosure of core indicators. These simplifications prevented users in the financial industry from obtaining the information they need to meet their own disclosure obligations under existing regulation (e.g., SFDR, BMR, CRR). More generally, the reporting delays granted and the extent of flexibility introduced, permitting companies to withhold data they judge non-material, raised serious questions about the achievement of the core CSRD objectives of availability, comparability, and reliability.
[7] There is a significant basis for critiques of bureaucratic overreach: in earlier technical debates, even supporters of transparency had warned against indicator inflation and the use of ill-defined or unfit-for-purpose metrics (for early warnings, see inter alia Amenc and Ducoulombier, 2020, and Ducoulombier, 2020, regarding the sustainability update of the Benchmark Regulation). Over-ambition and lack of coordination, producing gaps and inconsistencies across texts that were meant to reinforce one another, together with the sequencing choice that saw transparency obligations imposed on investors before they were imposed on investee companies, consistent with the idea that finance would drive the transition but also with the reluctance to confront the real economy, led to considerable expense, waste, and delays that weakened the sustainable-finance framework (Ducoulombier, 2025). The more progressive forces within the industry, however, have relativised these failings as transient growing pains in the implementation of an exemplary architecture, calling for its consolidation, by completing and strengthening the existing framework, rather than its dismantling. This position, exemplified by Eurosif, strikes a balance between reactionary pressures for rollback and the excesses of political and technical actors insufficiently grounded in business and data realities.
[8] The “One Big Beautiful Bill Act” of July 2025 has tilted the playing field by repealing or scaling back many of the key incentives established under the Inflation Reduction Act (IRA) of August 2022. At the same time, it has introduced a historic increase in fossil fuel subsidies, encompassing new tax breaks, expanded permitting on public lands, and regulatory rollbacks that facilitate greater fossil fuel extraction and production. This represents a regressive transition risk shock.
[9] After this note was written, the federal bank agencies (i.e., the Federal Deposit Insurance Corporation; Federal Reserve Board, and the Office of the Comptroller of the Currency) announed the withdrawal of interagency Principles for Climate-Related Financial Risk Management for Large Financial Institutions.
[10] In May, US Department of Labor withdrew its defence of the rule permitting ERISA (pension scheme) fiduciaries to consider sustainability factors and other “collateral benefits” and announced plans to reinstate a “pecuniary-only” standard.
[11] On 10 February, the SEC updated its interpretation of the Schedule 13 filings which institutional investors use to report ownership stakes. The new interpretation narrows the ability to engage with companies on environmental, social, and governance issues without losing the eligibility for simplified Schedule 13G filing in lieu of the more onerous Schedule 13D, which is required of investors who intend to influence the issuer. On 12 February, Staff Legal Bulletin 14M reversed a November 2021 interpretation of Rule 14a-8 under the Securities Exchange Act of 1934 that restricted the ability of companies to exclude shareholder proposals from their proxy statements when they were raising significant public policy, or broad social or ethical, questions not closely related to the business of the company.
[12] Most notably, the Environmental Protection Agency (EPA) has launched an unprecedented deregulatory campaign, rolling back or proposing to roll back over thirty key environmental rules related to air quality, greenhouse gas emissions, and climate. Central to this effort is its July 29 proposal to rescind the foundational 2009 Endangerment Finding, which classified key greenhouse gases as pollutants under the Clean Air Act and provided the legal basis for regulating emissions from vehicles, power plants, and other sources.
[13] In this regard, the European Commission’s Omnibus Simplification Package of February 2025 proposed a two-year delay in CSRD implementation for most companies beyond the initial wave, alongside a substantial narrowing of the reporting scope exempting 80% of companies previously covered.
[14] On 20 March 2025, the UN Working Group on business and human rights warned that the proposed changes to the draft CSDDD under the Omnibus Simplification Package, notably restricting due diligence to direct partners in the supply chain, did not align with the UN Guiding Principles on Business and Human Rights (UNGPs) and risked “diluting existing EU standards that have made the EU a leader in business and human rights.” The Group further criticised the removal of the EU-wide harmonized civil liability regime, which reduces corporate accountability, diminishes legal certainty and restricts victims' access to justice.
[15] The development of the Omnibus Simplification Package was indeed characterized by a rushed and opaque process, which attracted widespread criticism and was formally challenged through a complaint lodged with the European Ombudsman. In response to allegations of maladministration and concerns about due adherence to democratic legitimacy and procedural rigour, the European Commission defended its conduct by explaining that the Better Regulation principles, which it failed to follow, are non-binding recommendations intended to guide policymaking rather than compulsory procedural safeguards.
[16] After this article was written, on 8 October 2025, the right-wing European People’s Party (EPP) extracted sustainability-related deregulation concessions from its centrist allies by brandishing the threat of an alliance with the far right.
[17] After this article was written, media outlets reported on a letter dated October 6, 2025, signed by the CEOs of TotalEnergies and Siemens, and allegedly on behalf of 46 European companies, urging the French President and the German Chancellor to abolish the CSDDD as excessively burdensome and harmful to Europe’s competitiveness. In addition, the CEOs called for a halt to the carbon pollution quota phase-out. This public push represents a significant escalation in corporate efforts to stem sustainability regulation in the European Union.