FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
To guide companies, the ESMA, the European Com - mission and the Haute Autorité de l ’ Audit have respectively published recommendations, Q&A and guidelines. The CSRD framework has been further amended by Directive (EU) 2026/470 of February 2026, which nar - rows the scope of application by raising the eligibil - ity thresholds to companies with more than 1,000 employees and more than EUR450 million in net turnover, effectively excluding a significant number of undertakings and definitively removing listed SMEs from the regime. Several additional adjustments have also been introduced, including: • a value chain cap limiting reporting requests on suppliers with fewer than 1,000 employees to the voluntary VSME standard; • a significant streamlining of the ESRS framework (estimated 50–60% reduction in data requirements, removal of sector-specific standards); • the abandonment of the move to reasonable assur- ance; and • a right to omit information where disclosure would seriously harm commercial interests (including in relation to intellectual property, trade secrets or classified information). Raison D’Être and Mission-Driven Companies In 2019, the Pacte Act introduced two optional tools into French corporate law designed for companies intending to redirect their focus on their role in society, beyond their economic performance. • The raison d ’ être (core purpose) allows a company to define the ethical standards and orientations according to which its activities will be conducted. It is incorporated into the by-laws, with its effec - tiveness depending on the precision with which it is drafted. • The status of mission-driven company goes further, requiring the adoption – in addition to a raison d ’ être – of specific commitments towards environ - mental, ethical and/or social concerns, approved by the general meeting and included in the by- laws. Compliance is assessed regularly by a dedi - cated mission committee (comprising at least one employee), and failure to comply potentially entails
both withdrawal of the status and liability claims against the directors and the company. 7.2 ESG Developments Green Shareholder Activism and “Say-on-Climate” In recent years, shareholder activism has increasingly focused on ESG and climate-related issues. Since 2020, activist investors have increasingly requested issuers in high-impact sectors to submit their climate strategy to a shareholder vote; following initial resist - ance, most issuers have progressively incorporated advisory say-on-climate resolutions into their general meeting agendas, encouraged by the HCJP (Decem - ber 2022) and the AMF (March 2023). A proposal to introduce a “say-on-climate” statutory regime includ - ing new obligations for listed companies with a view to improving their climate strategy was made as part of the discussions on the Green Industry Act in 2023, but was in the end rejected by the French legislature. Sanctions Regarding Compliance With Corporate Duty of Care Please refer to 7.1 ESG Requirements for develop - ments regarding the Corporate Duty of Care frame - work. Recent case law confirms a progressive judicial con - solidation of the French duty of care regime as a standard of corporate liability. In La Poste (Paris Court of Appeal, 17 June 2025), the court confirmed the non-compliance of the company’s vigilance plan due to methodological deficiencies, identifying in particular an overly general risk mapping, insufficient alignment of third-party assessment pro - cedures with identified risks, an inadequately struc - tured whistle-blowing mechanism, and a monitoring system insufficiently linked to risk prevention objec - tives. This decision provides detailed methodologi - cal requirements for the design and implementation of vigilance plans, reinforcing the central role of risk mapping as the foundation of the system. In Laboratoires Yves Rocher (Paris Judicial Court, 12 March 2026), the court partially upheld claims brought by former employees of a Turkish subsidiary, a local trade union and NGOs, holding that French duty of care legislation qualifies as a loi de police applicable
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