Saudi Gazette report

RIYADH — The Gulf Cooperation Council (GCC) on Friday expressed deep concern over two proposed European Union laws on corporate sustainability due diligence and corporate sustainability reporting, warning they could impose broad new obligations on major companies operating in the European market.

In a statement, the GCC — comprising the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait — said the laws would effectively require large European and international companies to adopt the EU’s sustainability framework, comply with additional human rights and environmental requirements, submit climate-related plans beyond existing international agreements, and file detailed sustainability impact reports or face financial penalties.

The bloc noted that although the European Parliament proposed amendments to ease or remove certain provisions, the changes “do not meet the expectations” of GCC states and still pose potential risks to Gulf companies active in Europe, particularly under the tightened regulatory environment that could affect competitiveness and long-term business operations.

The GCC said member states remain committed participants in global human rights, environmental and climate bodies, aligning national laws with international principles while preserving sovereign rights. It pointed to the Gulf states’ participation in UN mechanisms, including the Paris Agreement and the UN Framework Convention on Climate Change, and their regular submission of transparent reports in international forums.

Despite these efforts and the GCC’s continued role in ensuring reliable energy supplies to Europe, the bloc warned that ongoing negotiations among EU institutions over the laws could negatively affect the stability of those supplies.

The statement added that Gulf companies subject to the new laws — despite operating under international best practices — may be forced to assess the risks posed by the legislation, including the possibility of withdrawing from the European market and seeking alternatives.

The GCC urged its European partners to either cancel the law or limit its application to within the EU to avoid cross-border impacts should the bloc decide to proceed.