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Exxon CEO calls for revocation of EU sustainability law

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EU law could push US businesses out of Europe, Woods warns

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Exxon pauses 100 million euro investment due to EU draft

rules

By Sheila Dang

HOUSTON, Sept 18 (Reuters) - Exxon Mobil ( XOM ) is

stepping up attacks against a European Union corporate

sustainability law and has taken its concerns directly to U.S.

President Donald Trump, warning that the regulation will lead to

more businesses leaving Europe.

The EU's corporate sustainability due diligence directive,

or CSDDD, was adopted last year and requires companies to fix

human rights and environmental issues within their supply

chains, or face a baseline fine of 5% of global turnover.

In response to criticism from businesses and leaders of

France and Germany that the law would harm the bloc's

competitiveness, the European Commission proposed a set of

changes earlier this year to loosen the requirements.

That won't be enough, Exxon CEO Darren Woods told Reuters in

an interview, calling for the law to be revoked entirely.

Woods said he has spoken about the regulation with Trump and

other members of the administration who work on trade or examine

EU policy and the administration had raised concerns about CSDDD

as part of trade negotiations with the bloc.

The simmering dispute is another flashpoint in the fraught

relationship between Washington and Brussels, as the

former recently considered unprecedented sanctions on EU

officials over separate tech legislation.

"We have slowly been pulling out of Europe," Woods said,

noting that the oil producer has sold, shut down or exited

nearly 19 operations due to what he said was red tape impeding

business.

"This is another piece of legislation that would accelerate

that incentive, or warrant businesses to reduce their activity

in Europe."

The European Commission did not immediately respond to a

request for comment.

The legislation would force Exxon to apply the environmental

laws to its operations around the world, Woods said, adding that

a fine of 5% of global sales would be "bone-crushing."

The top U.S. oil producer's sales were $339 billion last

year.

U.S. lawmakers are also taking steps to help. A bill

introduced by Senator Bill Hagerty from Tennessee in March aims

to defend American companies from being forced to comply with

CSDDD.

EU countries and lawmakers aim to start negotiations on the

proposed changes to loosen the policy next month. The move to

weaken the law has dismayed environmental activists who say it

guts corporate accountability.

On Thursday, Exxon also announced it is pausing the

investment of 100 million euros ($118 million) in European

plastic recycling because of separate draft EU rules.

Woods said he was hopeful that progress would be made by

U.S. lawmakers to address CSDDD, but has been disappointed by

the response so far from EU regulators.

"There is some movement, but we need to see resolution

sooner rather than later," he said.

(Reporting by Sheila Dang in Houston; additional reporting by

Kate Abnett; editing by Nathan Crooks and Lincoln Feast.)