{"id":140144,"date":"2026-04-21T10:11:49","date_gmt":"2026-04-21T10:11:49","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=140144"},"modified":"2026-04-21T10:11:49","modified_gmt":"2026-04-21T10:11:49","slug":"france-environmental-social-and-governance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/france-environmental-social-and-governance\/","title":{"rendered":"France: Environmental, Social and Governance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-140144","comparative_guide","type-comparative_guide","status-publish","hentry","guides-environmental-social-and-governance","jurisdictions-france"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Signature Litigation AARPI<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2020\/06\/signature-litigation-rectangle-logo-002.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Signature Litigation AARPI<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2020\/06\/signature-litigation-rectangle-logo-002.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Environmental, Social and Governance laws and regulations applicable in France<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Climate \u2013 the law governing operations that emit Greenhouse Gases (e.g. carbon trading) is addressed by Environment and Climate Change international guides, in respect of ESG:  a. Is there any statutory duty to implement net zero business strategies;  b. Is the use of carbon offsets to meet net zero or carbon neutral commitments regulated;  c. Have there been any test cases brought against companies for undeliverable net zero strategies;  d. Have there been any test cases brought against companies for their proportionate contribution to global levels of greenhouse gases (GHGs)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Directive (EU) 2022\/2464 of 14 December 2022 on Corporate Sustainability Reporting (CSRD) imposes an obligation on certain companies to provide information on their sustainability practices. The CSRD was transposed into French law by Ministerial Order No. 2023-1142 of 6 December 2023. A Decree No. 2023-1394 was also published on 30 December 2023, with the aim of specifying the information to be included in the &#8220;sustainability report&#8221;. Furthermore, Directive (EU) 2024\/1760 on Corporate Sustainability Due Diligence (CSDDD) initially aimed at imposing a transition plan for climate change mitigation. However, this requirement was removed by Directive (EU) 2026\/470 or the so-called \u201cEU Omnibus I Directive\u201d, which entered into force on 18 March 2026.<\/p>\n<p>Pursuant to Article L. 232-6-3 of the French Commercial Code, large companies include sustainability information in a separate section of their management report (&#8220;sustainability report&#8221;). This information makes it possible to understand the impact of the company&#8217;s activity on sustainability issues, as well as how these issues influence the development of its business, its results and its situations. &#8220;Sustainability issues&#8221; include environmental, social and corporate governance issues.<\/p>\n<p>It should be noted that the EU Omnibus I Directive has modified the scope of companies concerned by the sustainability report requirement. More specifically, for EU companies, this requirement will apply only to companies with more than 1,000 employees and a net turnover exceeding \u20ac450 million; for companies from third countries, the disclosure requirement will now apply to companies whose parent company generates net turnover in the EU of more than \u20ac450 million. The EU Omnibus I Directive has also introduced the \u201cValue Chain Cap\u201d, a mechanism that allows companies with fewer than 1,000 employees to refuse to disclose information other than that required by voluntary disclosure standards. Finally, the EU Omnibus I Directive provides Member States the option to exempt companies that do not meet the new CSRD application criteria and which were due to report in 2025 and 2026. These provisions must be transposed into French law by 19 March 2027 at the latest.<\/p>\n<p>The sustainability report must inter alia include information about the company&#8217;s time-bound sustainability objectives and progress towards these objectives, including, where appropriate, absolute greenhouse gas emission reduction targets for at least 2030 and 2050. This information should be accompanied by a statement indicating whether these objectives are based on scientific evidence (Article R. 232-8-4 of the French Commercial Code).<\/p>\n<p>The 2020\/852 Taxonomy Regulation of 18 June 2020, which is part of the goal of carbon neutrality by 2050 set out in the European Green Deal, naturally also applies in France. This Regulation outlines the criteria for determining whether an economic activity qualifies as an environmentally sustainable investment. The Taxonomy Regulation objectives focus on climate change mitigation and pollution prevention control, which includes carbon neutral commitments.<\/p>\n<p>Furthermore, companies with at least 500 employees are required to draw up a balance sheet of their greenhouse gas emissions, which is updated every four years (Articles L. 229-25 and R. 229-46 to R. 229-50-1 of the French Environmental Code). To measure the various greenhouse gas emissions, the French Environment and Energy Management Agency (ADEME) uses a calculation based on &#8220;physical&#8221; (i.e. the quantity of CO2 that is emitted by one unit consumed) or &#8220;monetary&#8221; (i.e. the quantity of CO2 that is generated by a product or a service relative to its price) emission factors. It is worth noting that it is prohibited to claim in an advertisement that a product or a service is carbon neutral, or to use any wording of equivalent meaning or scope, unless the supporting information (such as the greenhouse gas emissions sheet) is made public (Article L. 229-69 of the French Environmental Code).<\/p>\n<p>Carbon offsetting in France is mainly regulated by EU Law, in particular by the EU Emissions Trading Scheme (EU ETS). Launched in 2005, the EU ETS was established under the Kyoto Protocol and is governed by Directives 2003\/87\/EC and 2004\/101\/EC, supplemented by Directives 2008\/101\/EC, 2009\/29\/EC and Regulation 1031\/2010. More specifically, Directive 2003\/87\/EC was transposed into French law through Articles L. 229-5 et seq. of the French Environmental Code. The carbon market covers sectors such as electricity and heat production, heavy industry (including refineries, steel, cement, and chemical production), as well as aviation and shipping companies, subject to certain conditions.<\/p>\n<p>To date, there has been no case law nor action to hold French companies liable on the grounds of their proportional contribution to global levels of greenhouse gas emissions. This can be explained by the fact that claimants would eventually have to rely either on strict liability regime or on a tort liability regime, for which causation must be established and which would be rather difficult. NGOs also tend to ground their legal actions on French Law No. 2017-399 of 27 March 2017 on the duty of vigilance. One notable case has been brought by three NGOs (Sherpa, Notre Affaire \u00e0 Tous, France Nature Environnement) and the City of Paris against TotalEnergies for breach of its climate duty of vigilance. The case is pending before the Paris Civil Court. Since Signature Litigation is involved in one of these cases, it is unable to make any comment on them.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Biodiversity \u2013 are new projects required to demonstrate biodiversity net gain to receive development consent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The environmental assessment of projects, governed by Articles R. 122-1 et seq. of the French Environmental Code, which transposes Directive 2011\/92\/EU, aims to design projects that minimize environmental impact.<\/p>\n<p>Projects falling under one or more categories listed in the table attached to Article R. 122-2 of the Environmental Code are subject to an environmental assessment. These include, for instance, wind farm projects, integrated iron and steel works, and the construction of highways and expressways, among others.<\/p>\n<p>The environmental assessment involves an impact study conducted by the project owner, the content of which is defined by Article R. 122-5 of the French Environmental Code and includes a comprehensive analysis of the project\u2019s impact on biodiversity. The study is followed by an opinion issued by an environmental authority. Both the study and the opinion are considered when granting project authorization by the relevant local authority or competent state department.<\/p>\n<p>In addition, impacts on biodiversity caused by the implementation of any construction project, activity or structure, or by the execution of a plan, scheme, programme or other planning document must, as a matter of priority, be avoided, or failing that, minimised (Article L. 163-1 et seq. of the French Environmental Code). For instance, several solar farm projects have been cancelled because the guarantees for ecosystem preservation were insufficient.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Water \u2013 are companies required to report on water usage?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Following Article R. 232-8-4 of the French Environmental Code, large companies must inform on their sustainability strategies. The norm ESRS (European Sustainability Reporting Standards) E3, which is part of the CSRD, regulates the information that companies must disclose in their sustainability report with regard to water and marine resources.<\/p>\n<p>More specifically, ESRS E3 aims to provide stakeholders with a clear understanding of the company&#8217;s positive and negative impacts on water resources, the preventive or corrective actions implemented to manage these impacts, the company&#8217;s contribution to the ambitions of the European Green Deal. Amendments to this standard have been proposed as part of the \u201cAmendments to ESRS E3 Exposure Draft\u201d dated July 2025.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Forever chemicals \u2013 have there been any test cases brought against companies for product liability or pollution of the environment related to forever chemicals such as Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Legal action has been ongoing in France&#8217;s Lyon region since May 2022, initiated by residents, associations, trade unions, and municipal authorities.<\/p>\n<p>In 2022, a group of environmental associations and individuals initiated environmental criminal summary proceedings (r\u00e9f\u00e9r\u00e9 p\u00e9nal environnemental) against Arkema France, because of the alleged contamination of the Rh\u00f4ne area with PFAS. The summary proceedings, which sought the immediate limitation of PFAS discharges and the launch of an analysis campaign to assess the extent of the contamination, was dismissed by the Court in first instance and appeal. The plaintiff associations and individuals challenged this dismissal before the French Supreme Court (Cour de cassation), which upheld the Court of Appeal\u2019s strict interpretation regarding the parties to the proceedings. In other terms, the procedure for summary environmental criminal proceedings is a matter for the Public Prosecutor\u2019s Office and the defendant.<\/p>\n<p>In May 2022, the mayor of Pierre-B\u00e9nite, a commune in Lyon, filed a complaint against an unknown person for PFAS pollution, citing risk to public safety. A judicial investigation began in July 2023 to assess the allegations and identify responsible parties. By 30 October 2023, 34 local authorities, seven fishing associations and 35 individuals joined the case, addressing concerns about endangerment of lives, violations of chemical substance regulations, ecocide allegations, and groundwater contamination. The investigation is ongoing and expected to take several years.<\/p>\n<p>More recently, four organisations and nearly 200 individuals took legal action against manufacturers Arkema and Daikin Chemicals before Lyon Civil Court. The claimants seek compensation for the damage caused by the pollution of the area resulting from the discharge of PFAS by the facilities of the two companies located in Oullins-Pierre-B\u00e9nite (Rh\u00f4ne) in the \u201cVall\u00e9e de la Chimie\u201d, south of Lyon.<\/p>\n<p>Outside of the Lyon region, a decision from the Versailles Court of Appeal dated 18 June 2025 ordered Shell France to pay more than \u20ac15 million in damages for claims relating to PFAS substances and the \u201cMerlon\u201d toxic waste dump. As the producer of the waste, Shell France remains liable for its failure to manage it properly. This decision confirms that a party may seek compensation for environmental damage in parallel with a claim for contractual liability, provided that the environmental harm stems from facts distinct from the breach of contract, without being precluded by the principles of non-exclusivity and non-accumulation of contractual and non-contractual liability, or by a non-recourse clause. Additionally, according to this decision, any commercial company may bring an action for compensation for ecological damage provided it can demonstrate that it has standing and an interest in bringing such an action, regardless of its corporate purpose, which could open the door to litigation between companies on the grounds of ecological damage.<\/p>\n<p>Furthermore, France enacted Law No. 2025-188 on 17 February 2025, which inter alia prohibits, as of 1 January 2026, the manufacture, import, export and placing on the market of cosmetics, waxes, clothing, footwear and their waterproofing agents containing PFAS which exceed the residual concentration limits laid down by decree. The law also mandates public access to information on PFAS-emitting sites.<\/p>\n<p>These latest developments will undoubtedly lead to new legal actions against companies for PFAS-related environmental pollution.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Circularity \u2013 a. The law governing the waste hierarchy is addressed by the Environment international guide, in respect of ESG are any duties placed on producers, distributors or retailers of products to ensure levels of recycling and \/ or incorporate a proportionate amount of recycled materials in product construction? b. Are any duties placed on producers, distributors or retailers of products to handle the end-of-life of the products placed on the market?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Law No. 2020-105 of 10 February 2020 (the &#8220;Anti-Waste&#8221; law) introduced a number of measures to promote a circular economy based on recycling channels and extending product lifespans. To this end, producers falling under the Extended Producer Responsibility (EPR) scheme are required to develop and implement a prevention and eco-design plan with the objective of reducing the use of non-renewable resources, increasing the use of recycled materials and increasing the recyclability of their products.<\/p>\n<p>For instance, according to Article L. 541-9 of the French Environmental Code, certain products and materials must incorporate a minimum rate of recycled material, except for materials derived from renewable raw materials and provided that the impact is positive for the environment. For example, the recycled plastic content of beverage bottles composed predominantly of polyethylene terephthalate by mass must be at least 25% (Article D. 543-45-2 of the French Environmental Code). This rate has been set at 30% for 2030.<\/p>\n<p>In this regard, it is important to note that the Ecodesign for Sustainable Products Regulation (ESPR), which entered into force on 18 July 2024, is directly applicable in France. This Regulation aims to increase recycled content for almost all categories of physical goods. In April 2025, the European Commission adopted its 2025-2030 working plan for the ESPR and Energy Labelling Regulation. The plan aims to promote sustainable, repairable, circular and energy efficient products across Europe, in line with the Clean Industrial Deal and the Competitiveness Compass. The priority products are steel and aluminium, textiles (with a focus on apparel), furniture, tyres and mattresses as well as a number of energy-related products. The European Commission will also introduce horizontal measures to promote product repairability, including a repairability score, as well as requirements on recyclability of electrical and electronic equipment.<\/p>\n<p>Furthermore, the ESPR introduces the Digital Product Passport which will mandate producers to provide transparent data on the product\u2019s circularity including on the composition, material origin and compliance while offering specific instructions to facilitate repair, reuse, and end of life recycling. It should start being implemented in 2027.<\/p>\n<p>As for the end-of-life of products, Articles L. 541-10 et seq. of the French Environmental Code establish the EPR scheme, which is based upon the \u201cpolluter pays\u201d principle and is applicable to specific sectors. Companies falling under that scheme are responsible for the disposal of waste generated by the products they placed on the French market. In practice, the responsibility is passed on to eco-organisations to which companies pay a contribution so that they can handle waste management and organize its recycling.<\/p>\n<p>It is also worth mentioning that the Packaging and Packaging Waste Regulation 2025\/40 (PPWR) entered into force on 11 February 2025 and will generally apply from 12 August 2026. This Regulation covers all packaging and packaging waste, regardless of material or origin, sets requirements for manufacturing, composition, and reusable or recoverable nature of all packaging placed on the EU market, and includes packaging waste management and prevention measures.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Plastics \u2013 what laws are in place to deter and punish plastic pollution (e.g. producer responsibility, plastic tax or bans on certain plastic uses)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Anti-Waste law provides for a total halt to single-use plastics in France by 2040. To achieve this, targets for reduction, reuse, and recycling (&#8220;3R&#8221;) objectives are set and updated every five years to reach this goal. Decree No. 2021-1610 of 29 April 2021 sets the targets for the period 2020-2025, consisting of 20% reduction in single-use plastic packaging by the end of 2025, 100% reduction in unnecessary single-use plastic packaging, and 100% recycling of single-use plastic packaging by the end of 2025.<\/p>\n<p>Recently, France issued a new \u201dPlastic Plan for 2025-2030\u201d that aims to accelerate the fight against plastic pollution through source reduction, the expansion of reusable packaging, improved recycling rates, and public sector exemplariness. Its core ambition is to eliminate non-recyclable packaging from the market by 2030. To achieve this, the plan implements concrete measures, such as a financial \u201cbonus-malus\u201d system that penalizes non-recyclable packaging and dedicated funding to support reuse innovations.<\/p>\n<p>In the meantime, certain products have been banned from sale, such as straws, disposable cutlery and all oxo degradable plastic objects. In addition, Law No. 2020-105 also set a goal of reducing the number of single-use plastic beverage bottles placed on the market by 50% by 2030. This law also provides that producers of plastic packaging that cannot be recycled at the end of its life are subject to penalties. The Directorate-General for Competition, Consumer Affairs and Fraud Prevention (&#8220;DGCCRF&#8221;) conducts regular investigations to verify the application of these bans.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Equality Diversity and Inclusion (EDI) \u2013 what legal obligations are placed on an employer to ensure equality, diversity and inclusion in the workplace?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Articles L. 1132-1 et seq. of the French Labor Code, all forms of discrimination based on origin, race, sex, sexual orientation, gender identity, age, family and pregnancy status, genetics, political opinions, trade union activity, religion, name and surname, place of residence, state of health, and disability are prohibited.<\/p>\n<p>For instance, the French Labor Code contains a specific section dedicated to professional equality between men and women. This section provides for several requirements, such as:<\/p>\n<ul>\n<li>The prohibition of any sexist behavior that may create a hostile environment (Article L. 1142-2-1 of the French Labor Code);<\/li>\n<li>The consideration by the employer of the objective of eliminating gender pay gap (Article L. 1142-7 of the same Code);<\/li>\n<li>In companies with more than 50 employees, the obligation of the employer to publish a set of indicators annually relating to gender pay gaps, and the measures implemented to eliminate them (Article L. 1142-8 of the same Code, as amended by Law No. 2021-1774 of 24 December 2021 on the acceleration of economic and professional equality, known as the \u201cRixain Law\u201d);<\/li>\n<li>In companies employing at least 1,000 employees for the third year running, the obligation for the employer to publish an annual report on any gaps in the representation of women and men among executives and management bodies (Article L. 1142-11 of the same Code, as amended by the \u201cRixain Law\u201d). According to the Rixain law, companies will have to achieve a minimum target of 30% gender diversity among senior managers of governing bodies from 1 March 2027. This rate will be increased to 40% from 1 March 2030.<\/li>\n<\/ul>\n<p>Moreover, the Law No. 2023-623 of 19 July 2023, aimed at strengthening women&#8217;s access to positions of responsibility in the service, raises the mandatory quota for the first appointment of women to senior and management positions to 50% and introduces an Index of Professional Equality in the civil service.<\/p>\n<p>Furthermore, Order No. 2024-934 dated 15 October 2024 which will come into force gradually from 1 January 2026, transposes the so-called \u201cWomen on Boards\u201d (Wob) Directive into national law, thereby strengthening France\u2019s already stringent requirements regarding gender diversity on boards. The Order goes beyond the directive, by setting stricter obligations to more operators than those provided in the Directive.<\/p>\n<p>In addition to the provisions relating to professional equality between men and women, specific provisions are also in place for disabled workers. For instance, pursuant to Article L. 5212-2 of the French Labor Code, disabled employees must represent at least 6% of the workforce of companies with more than 20 employees. Such companies have 5 years to comply with this requirement once the threshold is met. If the company does not respect this rate, it must pay an annual financial contribution.<\/p>\n<p>It is also worth noting that in companies employing more than 300 employees and, in any company, specializing in recruitment, employees responsible for recruitment tasks must receive training on non-discrimination in hiring at least once every five years (Article L. 1131-2 of the French Labor Code).<\/p>\n<p>As for upcoming requirements, Directive (EU) 2023\/970 introduces pay transparency from the start of the employer\u2019s recruitment process. Companies will be required to state in job advertisements and prior to the first interview the proposed remuneration or at least a pay range. Internally, employers will be required to make available to employees the criteria used to determine remuneration, remuneration levels and remuneration progress.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Workplace welfare \u2013 in respect of ESG are there any legal duties on employers to treat employees fairly and with respect?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Article L. 4121-1 of the French Labor Code, employers shall take the necessary measures to ensure the safety and protect the physical and mental health of their employees.<\/p>\n<p>The French Labor Code also recognises the right to dignity in the workplace and prohibits harassment. According to Article L. 1121-1, no one may restrict the rights of individuals or individual and collective freedoms which are not justified by the nature of the task to be performed or proportionate to the aim sought.<\/p>\n<p>Additionally, Article L. 1142-2-1 of the French Labor Code prohibits behaviours related to a person\u2019s sex that may lead to the creation of an intimidating, hostile, degrading, humiliating or offensive environment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Living wage \u2013 the law governing employment rights is addressed in the Employment and Labour international guide, in respect of ESG is there a legal requirement to pay a wage that is high enough to maintain a normal standard of living?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Articles L. 3231-2 et seq. of the French Labor Code, employees must be paid a minimum hourly wage called the &#8220;minimum interprofessional growth wage&#8221; (\u201cSMIC\u201d). This wage is indexed to inflation and is revised automatically on 1 January of each year. It is also automatically revised during the year if inflation exceeds 2% since the last revision and upon discretionary decision of the French authorities.<\/p>\n<p>In companies with more than 50 employees, a general negotiation on wages must be undertaken at least every 4 years as part of the \u201ccompulsory annual negotiations\u201d.<\/p>\n<p>In each sector of activity, trade unions negotiate with employers a \u201ccollective agreement\u201d (convention collective), a sector-specific agreement that may include more advantageous pay conditions than those granted by the law. A similar agreement may be concluded within a company and will prevail, except for compulsory provisions and exclusion clauses, over the collective agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Human rights in the supply chain \u2013 in relation to adverse impact on human rights or the environment in the supply chain:  a. Are there any statutory duties to perform due diligence;  b. Have there been any test cases brought against companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Law No. 2017-399 of 27 March 2017 on the duty of vigilance of parent companies and ordering companies introduced due diligence obligations in the French Commercial Code (Article L. 225-102-1) for certain large companies, which must draw up and effectively implement a vigilance plan. This plan must include reasonable due diligence measures to identify risks and prevent human rights and environmental abuses, including those committed by direct or indirect subsidiaries, in France or abroad.<\/p>\n<p>Law No. 2017-399 applies to certain types of public limited companies established in France with at least 5,000 employees within the company head office and its direct and indirect subsidiaries, whose head office is located in France, or at least 10,000 employees within the company and its direct and indirect subsidiaries, whose head office is located in France or abroad.<\/p>\n<p>Companies falling under the scope of the Law may be held liable in the event of failure to comply with these due diligence obligations. The competent court is the Paris Civil Court, and it is also possible to initiate summary proceedings before this Court.<\/p>\n<p>Around twenty cases have been initiated on the ground of French Law No. 2017-399 of 27 March 2017 on the duty of vigilance. Since Signature Litigation is involved in one of these cases, it is unable to make any comment on them.<\/p>\n<p>It must be noted that France was ahead of the Corporate Sustainability Due Diligence Directive (CSDDD), which aims to regulate the duty of care of companies at the European level. Recently, the EU Omnibus I Directive raised the thresholds of applicability of the CSDDD to EU companies with more than 5,000 employees and a global turnover of at least \u20ac1.5 billion (compared with 1,000 employees and \u20ac450 million previously). It also relaxed due diligence requirements, for instance by setting more targeted risk assessments or by reducing the maximum level of fines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Responsibility for host communities, environment and indigenous populations \u2013 in relation to adverse impact on human rights or the environment in host communities:  a. Are there any statutory duties to perform due diligence? b. Have there been any test cases brought against companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As further developed in question 10. a), companies subject to the Law No. 2017-399 of 27 March 2017 on the duty of vigilance must establish a vigilance plan, which aims to identify and prevent risks associated with their activities or those of their foreign subsidiaries, such as risks of human rights or environmental impacts in host communities.<\/p>\n<p>Around twenty cases have been brought before the French Courts on the grounds of French Law No. 2017-399 of 27 March 2017 on the duty of vigilance. Since Signature Litigation is involved in one of these cases, it is unable to make any comment on them.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have the Advertising authorities required any businesses to remove adverts for unsubstantiated sustainability claims?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under French law, advertising authorities have no power to impose sanctions for unsubstantiated sustainability claims. This being said, some soft law sources publish recommendations on misleading advertising and commercial practices.<\/p>\n<p>The French National Consumer Council (Conseil National de la Consommation), for instance, published the 2023 edition of its guide on environmental claims, in which it provides guidance on the criteria used to determine whether a claim is misleading.<\/p>\n<p>In addition, on 28 April 2020, the Professional Advertising Regulation Authority (Autorit\u00e9 de R\u00e9gulation Professionnelle de la Publicit\u00e9 or \u201cARPP\u201d) issued a new recommendation on sustainable development advertising which prohibits misleading, deceptive or non-conforming advertising regarding the advertiser\u2019s sustainable actions or on the properties of the advertised product. According to this recommendation, an advertiser must always be able to justify its environmental claims and its impact on sustainable development.<\/p>\n<p>In its 2023-2024 report, the ARPP, in collaboration with ADEME, highlighted a growing awareness of the need for more responsible advertising, as evidenced by the compliance rate, which is of 93.6%, compared with 92.4% in the previous report. However, it also stresses that significant challenges remain, especially in the accuracy of language and the proportionality of messages.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have the Competition and Markets authorities taken action, fined or prosecuted any businesses for unsubstantiated sustainability claims relating to products or services?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Claims against companies for unsubstantiated claims concerning products or services fall within the scope of Article L. 121-2 of the French Consumer Code, which prohibits misleading commercial practices. On this ground, the General Directorate for Competition, Consumption and Fraud Control (Direction G\u00e9n\u00e9rale de la concurrence, de la consummation et de la repression des frauds or \u201cDGCCRF\u201d) has the power to impose sanctions on companies making false or misleading claims in favour of sustainable development. These sanctions may include warnings, injunctions to cease and withdraw the unsubstantiated claim, infringement reports, etc. Sanctions may also take the form of penalties of up to 80% of the turnover over the last three years (Article L. 132-2 of the French Consumer Code).<\/p>\n<p>Although the authority has a power of Name &amp; Shame, most of these decisions remain confidential. In its 2023 report, the DGCCRF revealed that out of 1,100 establishments inspected, a quarter were found to be non-compliant, such as claims that were unjustified, imprecise, ambiguous, or even contrary to legal provisions. The DGCCRF therefore issued 141 warnings, 114 injunctions and filed 18 criminal or administrative proceedings to put an end to practices that were misleading for consumers. The most serious practices were reported and referred to the courts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any test cases brought against businesses for unsubstantiated enterprise wide sustainability commitments?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In recent years, there has been an increase in the number of cases brought by non-governmental organisations (NGOs) against French companies on the grounds of misleading commercial practices, including allegations on the environmental impact of products, prohibited by Article L. 121-2 of the French Consumer Code.<\/p>\n<p>For instance, a decision from the Paris Civil Court dated 23 October 2025 found TotalEnergies liable for greenwashing. According to the Court, TotalEnergies deliberately mislead consumers, leading them to believe that by purchasing the company\u2019s products they were contributing to an economy aligned with the scientific recommendations of the Paris Agreement, without specifying its own scenario. Furthermore, at least one communication was deemed misleading by omission as it contained \u201cno explanation or reference\u201d, presenting the ambition of carbon neutrality as an unqualified commitment. Finally, the Court ruled that this misinformation was likely to substantially alter the consumer\u2019s economic behaviour.<\/p>\n<p>It is important to note that, in March 2023, the European Commission issued a proposal for a Directive on substantiation and communication of explicit environmental claims (Green Claims Directive) which, if adopted, would create a legal framework for environmental claims and would certainly increase the number of court claims on this ground in all Member States of the EU.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory duty on directors to oversee environmental and social impacts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Articles 1833 of the French Civil Code and L. 225-35 of the French Commercial Code require directors to consider the impact of social and environmental issues in the decision-making process. They must encourage the company and its executives to pay a fair and reasonable attention to these issues, in relation to the other considerations that must be taken into account in the management of the business. This is however a mere best effort obligation as non-compliance with this requirement cannot lead to the nullity of the acts or deliberations of the bodies of the company.<\/p>\n<p>For limited companies, the board of directors determines the ESG strategy of the company and the means to implement such a strategy. In practice, the board of directors now makes sure that ESG issues are at the heart of the company\u2019s strategy and will usually appoint a specialised board committee dedicated to monitoring ESG issues.<\/p>\n<p>Even if to date the audit committee is the only specialised committee of the board of directors whose tasks are regulated by the law, French companies tend to increase the number of specialised board committees. In practice, on top of the audit committee, remuneration and appointment committees are also widespread, especially in listed companies. Strategic and ethics committees dedicated to ESG issues are also increasingly common.<\/p>\n<p>The board of directors has to make sure that the management board is fully involved in ESG issues. As for the management board, it makes sure that the company is able to comply with the relevant ESG regulations.<\/p>\n<p>If a company has adopted a raison d\u2019\u00eatre in its bylaws, the board of directors is required, in performing its duties, to take into account such raison d\u2019\u00eatre. The raison d\u2019\u00eatre grasps the values of the company, the social and environmental impacts of its activity and more generally the responsibility that the company intends to carry in the future. As such, it results from Articles 1850 of the French Civil Code and L. 225-251 of the French Commercial Code that directors may be held liable towards the company and its shareholders for instance by taking insufficient account of the raison d\u2019\u00eatre, by failing to pursue the social and environmental objectives of the company, or by acting in contradiction with them, they cause damage to the company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any test cases brought against directors for presenting misleading information on environmental and social impact?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>We are not aware of any test case brought against directors for presenting misleading information on environmental and social impact before French Courts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are financial institutions and large or listed corporates required to report against sustainable investment criteria?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>EU Regulations No. 2019\/2088 of 27 November 2019 (\u201cSFDR\u201d) and No. 2020\/852 of 18 June 2020 (\u201cTaxonomy Regulation\u201d) impose obligations applicable to certain economic operators carrying out financial activities, such as investment managers or investment funds, to provide transparent information on the environmental impact of their financial investments.<\/p>\n<p>In this respect, Article 3 of the SFDR requires financial market participants and financial advisers to publish on their website information about their policies on the integration of sustainability risks in their investment decision-making process or investment or insurance advice. Likewise, Article 5 of the Taxonomy Regulation also obliges financial actors to disclose, in the pre-contractual documentation, the information considered to assess the sustainability criterion of the financial investment presented as favorable to sustainable development. The Taxonomy Regulation also specifies in Article 8 that the non-financial statements to which companies are subject shall mention how and to what extent their activities are associated with economic activities that qualify as environmentally sustainable<\/p>\n<p>It ought to be noted that Article L. 533-22-1 of the French Monetary and Financial Code provides that portfolio management companies must include, in their sustainability risk policy, information on the risks related to climate change and the damage to biodiversity caused by their investments. Portfolio management companies must also make available to their subscribers and to the public a document setting out their policy on the inclusion in their investment strategy of ESG criteria and the means implemented to contribute to the energy and ecological transition, as well as a strategy for implementing this policy.<\/p>\n<p>In addition, Ministerial Decree No. 2023-1394 of 30 December 2023, which specifies certain details of Order No. 2023-1142 of 6 December 2023 transposing CSRD into French law, introduced Article R. 232-8-4 in the French Commercial Code. This Article provides that the sustainability information that the companies must disclose shall describe the company\u2019s plan, including actions taken or envisaged and related financial and investment plans, to ensure the compatibility of its business model and strategy with the transition to a sustainable economy, the limitation of global warming and the objective of climate neutrality. This legal framework will likely be adjusted by 19 March 2027, once the EU Omnibus I Directive will have been implemented into French law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility on businesses to report on managing climate related financial risks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As further developed in Question 1, the CSRD, which has been implemented into French law through Ministerial Order No. 2023-1142 and Decree No. 2023-1394, requires certain companies to report on sustainability practices. Thus, large companies must include a &#8220;sustainability report&#8221; in their management report, detailing time-bound sustainability objectives, progress, and greenhouse gas reduction targets for 2030 and 2050, supported by scientific evidence where applicable. Accordingly, information on climate related financial risks must be included in the sustainability report. Adjustments to these requirements have been introduced by the EU Omnibus I Directive, which must be implemented by Member States by 19 March 2027.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility on businesses to report on energy consumption?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As explained above, large companies must include a &#8220;sustainability report&#8221; in their management report, detailing time-bound sustainability objectives, progress, and greenhouse gas reduction targets for 2030 and 2050, supported by scientific evidence where applicable.<\/p>\n<p>Additionally, under Article L. 229-25 of the French Environmental Code, companies employing more that 500 employees in France must prepare a greenhouse gas emissions report. As part of this report, the company must describe its direct and indirect greenhouse gas emissions, which include the company&#8217;s energy consumption in its operation and production activities.<\/p>\n<p>It is worth mentioning the Eco-Energy Tertiary (EET) scheme, also know as the \u201cTertiary Decree\u201d, which requires a gradual reduction in final energy consumption across the tertiary sector to combat climate change. Each entity subject to the decree is required to meet one of the energy consumption reduction targets every decade: either in relative terms (a 40% reduction in energy consumption between 2030 and a reference year prior to 2010), or in absolute terms (an energy consumption target in kWh\/m\u00b2 determined by regulation based on the activity carried out within the liable entity). Entities\u2019 annual consumption is declared on the OPERAT platform (Observatory of Energy Performance, Renovation and Actions in the Tertiary Sector), managed by ADEME.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility on businesses to report on EDI and \/ or gender pay gaps?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Article L. 1142-8 of the French Labor Code requires companies with at least 50 employees to publish a Professional Equality Index. This index is calculated on the basis of several criteria, including the average pay gap between men and women. Depending on the criteria met, the company obtains a score that must be communicated each year to the Labor Inspectorate. The result is published on the Ministry of Labor website. Depending on the score obtained, the company may be asked to take certain measures in favor of EDI and equal wage.<\/p>\n<p>Furthermore, Directive (EU) 2023\/970 on pay transparency, adopted on 10 May 2023, must be transposed into French law by 7 June 2026. Its main aim is to improve transparency regarding pay to reduce the gender pay gap. In the event of a breach, the employer will be liable to an administrative fine, which will be either proportional to the total payroll or a fixed amount, depending on the seriousness of the breach.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility to report on modern day slavery in the supply chain?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Any company with at least 5,000 employees in France (or 10,000 employees, including subsidiaries) must establish and implement a vigilance plan to identify and prevent inter alia human rights in its own operations and those of its subsidiaries, suppliers, and subcontractors. The vigilance plan and the report on its effective implementation are made public and included in the management report of the company (Article L. 225-102-1 of the French Commercial Code).<\/p>\n<p>This legal framework should be monitored further to the implementation into French law of the EU Omnibus I Directive by 26 July 2028.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Trends and developments \u2013 Where do you see the most significant legal developments in ESG in your jurisdiction in the next 12 months? Do you expect a rise in Court disputes or enforcement actions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the coming year, we anticipate significant legal developments in ESG to concentrate on three main areas: the intensification of greenwashing enforcement, the implementation of PFAS\u2019 regulatory framework, and the reconfiguration of EU sustainability reporting rules.<\/p>\n<p>First, we expect a continued rise in greenwashing-related enforcement, driven by the growing density of applicable sustainability regulations and the increasing scrutiny of environmental communications. As environmental claims become more technical and verifiable, companies will need to exercise caution in how they market products and describe their environmental performance. Enforcement is likely to come from both regulatory authorities and courts, with courts already demonstrating a willingness to sanction misleading environmental narratives. The recent French case involving TotalEnergies, in which certain climate-related representations were found to be misleading, illustrates this emerging judicial trend and signals that ESG communication is exposed to traditional liability regimes.<\/p>\n<p>Secondly, we anticipate a significant increase in PFAS-related regulatory enforcement in France, following the entry into force of the law dated 17 February 2025, which introduces restrictions on PFAS exceeding certain thresholds in cosmetics, textiles, and waxes as of 1 January 2026. The key uncertainty for the coming months will lie in the enforcement strategy adopted by public authorities, particularly regarding inspection priorities and sanctioning policies. In parallel, litigation related to PFAS environmental pollution will continue. While enforcement actions may be initiated by NGOs, municipalities, and individuals, we also expect a broader range of disputes, including actions between companies themselves, as illustrated by the Versailles Court of Appeal decision dated 18 June 2025.<\/p>\n<p>Finally, we foresee increasing legal uncertainty for companies navigating the evolving EU ESG framework, in particular the interaction between existing transposed obligations and forthcoming adjustments linked to the EU Omnibus I Directive and revisions to the ESRS. Businesses are currently faced with a complex layering of rules, where certain obligations are already applicable under French transposition measures, while others remain subject to revision or political negotiation at EU level.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6574<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/140144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=140144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}