EU's Proposed Sustainability Rule Changes May Trigger Legal Risks

The European Union's contemplation of relaxing sustainability reporting regulations has drawn criticism from the academic sector. A letter signed by 31 legal scholars, published on Friday, highlighted potential legal risks and an increase in climate change-related lawsuits faced by European businesses.

Proposed by the European Commission in February, the amendment seeks to eliminate the requirement for large companies to implement a 'transition plan' focused on greenhouse gas reductions. Although companies would still need to devise such plans, the lack of legal obligation to enforce them has scholars voicing concerns about increased liabilities.

Among the scholars are Thom Wetzer from the University of Oxford, Christina Eckes from the University of Amsterdam, and Wolf-Georg Ringe from the University of Hamburg. The potential for more court cases was underscored, with the letter citing ongoing legal actions against firms like TotalEnergies and Eni. The European Commission, which believes the proposal facilitates business operations while maintaining climate targets, awaits negotiations with the European Parliament and member states.

(With inputs from agencies.)