EU’s Toughest ESG Proposal Revived as Italy Considers Backing It

(Bloomberg) -- European Union member states will make a new push Wednesday to win agreement on the bloc’s strictest ESG law this week in a last-minute deal aimed at bypassing German objections.

Belgium, which holds the EU’s rotating presidency, said that ambassadors will seek to approve a plan that would require firms to screen value chains for environmental and human rights abuses, according to a post on X. Adding the debate to Wednesday’s meeting agenda is a sign of optimism a qualified majority of member states are ready to support the deal, which was brokered with the European Parliament last year.

Germany, which blocked the deal earlier this month, has given no indication that it has changed its stance. But Italy, another holdout, may now support the deal, people familiar with the matter said. In exchange, Rome is seeking changes to rules governing packaging and packaging waste that have been the subject of fierce pushback by the country’s recycling lobby, they added.

A number of smaller countries would then be expected to support the deal, meaning a qualified majority could be reached even without Berlin’s support. Lawmakers in parliament still need to officially back the deal. Negotiations are ongoing, one of the people said.

Approval by member states would be a remarkable turnaround for a law that was on life-support after Germany’s Free Democrats, a business-friendly coalition member, refused to back the deal because of what it characterized as too much red tape for its companies. EU laws need to be finalized ahead of the European elections, which are scheduled to take place between June 6-9.

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