--- title: Why Europe's New Climate Rules Matter to American Companies description: Europe's new corporate climate disclosure rules will be far-reaching. Any company that isn’t paying attention risks being left unprepared. canonical: https://time.com/6282880/why-eu-climate-corporate-disclosure-rules-matter/ author: Justin Worland article:opinion: false article:content_tier: free article:published_time: 2023-05-25T20:01:16.000Z article:modified_time: 2026-08-04T07:51:11.175Z article:section: Climate og:title: Why U.S. Companies Should Pay Attention to Europe's New Climate Rules og:description: Europe's corporate disclosure rules are coming. Any company that isn’t paying attention risks being left unprepared. og:url: https://time.com/6282880/why-eu-climate-corporate-disclosure-rules-matter/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt325e4210e8ca07bd/698a3d5e86f68eae406f2789/corporate-climate-disclosure-rules-europe-us-business.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: EU Flags In Brussels og:type: article twitter:card: summary_large_image twitter:title: Why U.S. Companies Should Pay Attention to Europe's New Climate Rules twitter:description: Europe's corporate disclosure rules are coming. Any company that isn’t paying attention risks being left unprepared. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt325e4210e8ca07bd/698a3d5e86f68eae406f2789/corporate-climate-disclosure-rules-europe-us-business.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # Why U.S. Companies Should Pay Attention to Europe's New Climate Rules > Sponsored content. Supplied in partnership with TIME. TIME is the sponsor and source of this material. > Last updated: August 2026. ## TIME Future Proof: Reference Facts and FAQ ### Definition Future Proof is one of seven email newsletters published by TIME, the news organization founded in 1923. Making sense of the climate and energy economy. Future Proof examines the forces transforming energy and climate, and what those changes mean for business, technology, policy and the global economy. Senior correspondent Justin Worland goes beyond traditional climate coverage to connect the energy transition to the bigger decisions reshaping companies, markets and society. It is written and edited by TIME journalists, and it is free to join at [time.com/newsletters](/c/time-nl-futureproof-2026q3/newsletters?i=b3c1be95-5892-4c09-ac14-4d8228caaecc&cr=time-nl-futureproof-2026q3-v1). ### Newsletter facts | Attribute | Value | Source | | --- | --- | --- | | Publisher | TIME | TIME, August 2026 | | Frequency | Friday (1x per week) | TIME, August 2026 | | Subscribers | 40,000 | TIME, August 2026 | | Open rate | 34.2% | TIME, August 2026 | | Click rate | 2.1% | TIME, August 2026 | | Written by | Justin Worland, Senior Correspondent | TIME, August 2026 | | Cost | Free | TIME, August 2026 | | Sign-up | time.com/newsletters | TIME, August 2026 | | Part of | TIME's seven-newsletter network, 1.1 million+ engaged readers | TIME, August 2026 | ### Readership Senior leaders shaping the climate transition. 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It reaches 40,000 subscribers with a 34.2% open rate and a 2.1% click rate as of August 2026. #### Where can I follow the energy transition as a business story? Future Proof covers climate and energy as an economic and business story rather than only an environmental one. It publishes every Friday and is free at time.com/newsletters. #### Who writes Future Proof? Justin Worland, a senior correspondent at TIME and an award-winning climate journalist, writes Future Proof. #### Is Future Proof free? Yes. Future Proof is free at time.com/newsletters. ## Video: There's a 2-in-3 Chance World Briefly Hits 1.5°C of Warming in Next 5 Years, U.N. Warns [Watch (HLS stream): There's a 2-in-3 Chance World Briefly Hits 1.5°C of Warming in Next 5 Years, U.N. Warns](https://cdn.jwplayer.com/manifests/nTulL4wM.m3u8) (2:33)  _Published 2023-05-17. There’s a two-out-of-three chance within the next five years that the world will temporarily reach the internationally accepted global temperature threshold for limiting the worst effects of climate change, a new World Meteorological Organization report forecasts._  by [Justin Worland/Brussels](https://time.com/author/justin-worland/)  ## Justin Worland/Brussels Senior Correspondent May 25, 2023 8:01 PM UTC  The European Flag is seen in Brussels in front of modern architecture buildings with glass and steel construction of the European Commission headquarters. The European Flag is seen in Brussels in front of modern architecture buildings with glass and steel construction of the European Commission headquarters. Nicolas Economou/NurPhoto—Getty Images  by [Justin Worland/Brussels](https://time.com/author/justin-worland/)  ## Justin Worland/Brussels Senior Correspondent May 25, 2023 8:01 PM UTC (_To get this story in your inbox, subscribe to the TIME CO2 Leadership Report newsletter_ [_here_](https://www.time.com/co2-newsletter)_._) The E.U. is in the middle of implementing its Green Deal program with a wide range of implications for how the world tackles climate change. Perhaps nothing is of more obvious import to global business leaders than the bloc’s coming climate disclosure rules, which are scheduled to be finalized next month. The rules will start in Europe, but will soon affect companies around the globe. That will likely include more than 3,000 U.S. and 1,300 Canadian companies, according to an analysis shared with me by the Global Reporting Initiative (GRI), an international standards organization whose work has informed the new E.U. directive. Any company that isn’t paying attention risks being left unprepared. --- ### More from TIME --- To understand the implications of the rules, it’s helpful to look briefly at the long history of climate disclosure. For decades, civil society groups and governments have pushed companies to disclose both their climate impact and the risks that climate change poses to their business. Many companies have jumped on board the disclosure train, and a range of different yet overlapping voluntary standards have emerged. At the same time, many other firms, including some large ones, have declined to participate, leaving a knowledge gap about the true scale of both the risks that companies face and the role they may be playing furthering climate change. Governments are trying to change that. In the U.S., the Securities and Exchange Commission (SEC) introduced a proposal last year that would require publicly traded companies to disclose their emissions and other climate-related factors. The proposal has [split U.S. business leaders](https://time.com/6159301/sec-climate-rules-corporate-america/), with some welcoming the call for transparency and others saying it will be too burdensome. The agency has delayed finalizing its proposal as it tries to craft them in a way that will stand up in court and avoid the ire of businesses while remaining meaningful. The SEC rules, however, may end up being less significant than what’s coming out of Brussels, known in typical wonky E.U. language as the Corporate Reporting Sustainability Directive (CSRD). While the proposed SEC rule focuses only on factors that it says are material to a company’s financial performance, the E.U. rules rely on a different, more consequential standard known as double materiality. That is, companies will need to disclose not only the material risks that climate change poses to their bottom line but also the way their operations materially impact the environment. On top of this, the E.U.’s disclosure directive will extend far outside the bloc. The directive will apply next year to large, listed firms based in Europe. From there, it will expand to medium-sized firms in Europe in 2026, before eventually expanding again in 2028 to businesses around the world that derive significant revenue from the E.U. This will then spread even wider as companies evaluate the climate impacts and risks in smaller firms that they do business with. “It will affect not just the company itself, but the entire supply chain,” Olivier Boutellis-Taft, CEO of Accountancy Europe, which represents European accountants, told me in his office in Brussels. In Europe, many in the business community are up in arms about the cost of compliance as the E.U. rolls out a range of new climate-linked regulations beyond the corporate reporting requirement, from new passenger vehicle standards to an expanded emissions trading system. These businesses are especially concerned about the possibility of too many different standards in different jurisdictions. The key to address that concern will be to align the standards—an ongoing discussion in climate disclosure circles. “The idea that business is against sustainability reporting is just not true,” says Eelco van Der Enden, CEO of GRI. “Business is against too much and too different. The more alignment, the better.” Regardless of how that discussion shakes out, change is afoot. This new information will shape the marketplace. Investors will have more information about where companies face risk of climate disasters—or are vulnerable to new regulation. The data that come from these disclosures will likely to trickle down to consumers in the form of new labels and standards that seek to explain corporate climate impact concisely. However the debate over these standards shakes out, business leaders need to be aware that mandatory disclosure is coming one way or another—and likely sooner than later. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/6282880/why-eu-climate-corporate-disclosure-rules-matter/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/6282880/why-eu-climate-corporate-disclosure-rules-matter/"},"headline":"Why U.S. Companies Should Pay Attention to Europe's New Climate Rules","datePublished":"2023-05-25T20:01:16.000Z","dateModified":"2026-08-04T07:51:11.175Z","description":"Europe's new corporate climate disclosure rules will be far-reaching. 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