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Proposals remove obligation to enact emissions reduction

plans

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Companies say simpler rules needed to compete with US,

China

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Legal academics say plan may mean more companies are sued

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EU plan must be negotiated by EU countries and lawmakers

By Kate Abnett

BRUSSELS, May 9 (Reuters) - The European Union's plans

to cut back sustainability reporting rules could expose European

companies to more climate change-related lawsuits, 31 legal

scholars said in a letter published on Friday.

The European Commission in February proposed loosening

corporate sustainability rules for businesses in Europe,

responding to criticism that EU red tape hinders competitiveness

with rivals in China and the United States.

Among the changes, the EU would delete a requirement in its

due diligence law for large companies to put into effect a

"transition plan" to ensure they comply with the EU's targets to

cut greenhouse gas emissions. Companies would still need to have

such a plan, but would not be legally obliged to put it into

practice.

"Mere paperwork, instead of good faith action, would suffice

in meeting the obligation," the legal scholars said in the

letter.

"The absence of a binding regulatory framework will

correspond directly with increased liability risks for private

actors," they said, referring to potential court cases from

plaintiffs citing risks to the environment and public health.

The letter's 31 signatories included Thom Wetzer, Associate

Professor of Law and Finance at the University of Oxford,

Christina Eckes, Director of the University of Amsterdam's

Centre for European Law and Governance, and Wolf-Georg Ringe,

Director of the Institute of Law and Economics at the University

of Hamburg.

The academics cited said court cases highlighted the

climate-related legal risks businesses already face, citing

pending cases against companies including TotalEnergies and Eni,

from plaintiffs demanding the firms align their corporate

actions with climate goals.

A European Commission spokesperson declined to immediately

comment on the letter.

The Commission has previously said its proposals would make

life easier for businesses while keeping the EU on track for its

targets to cut CO2 emissions. The plan must be negotiated by the

European Parliament and member states - a process that can take

more than a year.

European businesses have long said strict regulations

hampered their ability to compete globally, with U.S. President

Donald Trump's aggressive deregulation drive increasing calls

for Brussels to act. Campaigners have criticised the EU plans to

soften sustainability rules as gutting corporate accountability.