Europe Isn’t Stepping Back, It’s Strengthening Its ESG Foundation: What It Means for Canadian Companies

Source: Yutika Gawdi for ESG Partners Inc. | · LINKEDIN · | November 6, 2025

Earlier this year, I moved to Canada from Europe where sustainability is part of how business gets done. I’ve seen what it looks like when ESG is core to daily decision-making, not a side conversation. Now back in Canada, I see those same expectations taking shape here.

The European Union’s ESG rules are already influencing how global supply chains operate – and that includes Canadian companies doing business with European partners or clients. That influence is becoming even more significant as Canada looks to diversify trade beyond the United States – a direction reinforced by Mark Carney’s recent federal budget. As Canada strengthens economic ties with Europe, understanding and aligning with EU ESG expectations will be central in accessing new opportunities.

These regulations aren’t just about compliance. They’re redefining what responsible business looks like and setting the standard for how companies build credibility, trust, and access to markets. Recently, however, we’ve seen headlines questioning whether the EU is taking a step back on sustainability, particularly after the European Parliament rejected the Omnibus Proposal[1]. The reality is more complex. Within Parliament, some members opposed the proposal because they wanted even greater simplifications to the CSRD and CSDDD. Others voted against it for the opposite reason – to prevent those simplifications from going too far and weakening the EU’s ESG framework.

From my European perspective, it’s the latter that tells the real story: Europe isn’t stepping back, it’s standing firm. The rejection was not a rejection of ESG itself, but a rejection of oversimplification. It reinforces the EU’s commitment to credible, consistent, and ambitious sustainability standards.

This moment matters because it shows that the EU is choosing integrity over convenience, keeping ESG standards strong – even when simplification would be easier. For companies outside Europe, this means one thing: ESG expectations will remain high, and they’re not going away.