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European companies will not become “an inch” more competitive unless the EU radically simplifies environmental regulations, the boss of Siemens Energy has warned, as Donald Trump’s nationalist economic agenda heaps pressure on the bloc to respond.
Christian Bruch, chief executive of the German maker of wind turbines, power plant turbines and transformers for power grids, said the burden on businesses from rules intended to measure their impact on the environment was “disproportionate” to the benefits.
“Just making cosmetic changes to regulations will not move us one inch closer to becoming more competitive,” Bruch said on Wednesday, as he singled out the Corporate Sustainability Reporting Directive, a rule the EU introduced in 2023 requiring companies to detail their environmental and social impact.
The directive has created more than 1,000 data points that must be reported to Brussels, he said, adding that it needed to be “radically shortened and simplified”.
“We’re completely overshooting the mark,” Bruch said. “And we cannot convince international investors that European companies are attractive.”
The comments add to the growing criticism from European companies and member states over the bloc’s regulations covering the environmental, social and governance impact of companies. The backlash has gathered momentum since the US election victory of Trump, who has dismissed ESG and pledged to roll back regulations on American companies.
Last month the biggest business lobby groups in France, Germany and Italy joined the campaign, calling for the European Commission to go beyond its promise to merely prune reporting regulations by adjusting EU laws “to match the standards of our competitors where appropriate”.
Several of France’s largest companies have also taken aim at the CSRD, with Patrick Pouyanné, the head of oil major TotalEnergies, describing it as “a monster” formed from “good intentions”.
In a sign of the growing pressure Brussels is under, the commission has said it will review the reporting requirements on companies across four pieces of environmental legislation, including CSRD, as part of a wider effort to slash red tape.
Valdis Dombrovskis, the EU commissioner for the economy who is heading the review, said on Wednesday that the bloc’s review was “not about deregulation” but rather finding a way to meet its policy goals “in a more efficient way”.
But the prospect of the EU watering down its reporting requirements has alarmed environmental campaigners.
“Europe’s competitiveness is in its regulations. This provides predictability, information and strategy, to forward-looking business planning to adjust to a lower carbon economy, which is where all countries need to go,” said Jurei Yada of E3G, an NGO.
The comments from Bruch came as Siemens Energy reported that its revenues increased by almost a fifth last year to €8.9bn and a record €131bn order backlog. The company’s valuation has quadrupled over the past year amid a boom in demand for power generation technology to run artificial intelligence data centres.
Bruch played down the wild swings in Siemens Energy’s share price last month after a breakthrough from Chinese AI start-up DeepSeek raised doubt over whether the vast investment in data centres in recent years was justified.
The steep plunge in its shares was “not appropriate”, he said, adding that “demand for electricity will grow either way”.
While Siemens Energy was well placed to benefit from increased demand for power generation technology that supports energy-hungry data centres, their needs still represented a tiny amount of global electricity demand, Bruch said.
With additional reporting by Paola Tamma in Brussels and Ian Johnston in Paris
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