Since 2001, French legislation has required large companies to provide non-financial reports regarding social, environmental and governance aspects. This law has been regularly assessed so far.
In 2009 and 2010, the French Parliament adopted two laws named the Grenelle Acts, which made the production of an annual report on CSR matters for all large companies with activities in France mandatory. Provisions for implementing these laws were adopted by the government in April 2012. This regulation was built on legislation adopted 10 years earlier and was the result of a large and lengthy consultation process with the various categories of stakeholders concerned with corporate social responsibility, taking place from 2007 until the end of 2011.
Building upon the proven New Economic Regulations (NRE) mechanism, Section 225 of the “Grenelle II” Act intends to correct these various flaws. The new requirement is that companies have to provide details in their annual reports "on how they take into account the social and environmental consequences of [their] activity and [their] social commitments in favour of sustainable development."
The implementation decree was published on April 26, 2012 and amends Section 225-102-1 of the Commercial Code with several notable innovations:
1. It widens the array of companies required to submit reports mandatorily, using several criteria: in short, by the 31st of December 2013, all companies with over 500 employees will be subject to these reporting requirements.
2. it broadens the amount of information required: there are now over 40 topics that companies must report on, divided into three themes: Social (employment, labour relations, health and safety…); Environmental (pollution waste management, energy consumption…); Commitments to sustainable development (social impacts, relations with stakeholders, human rights…). The list of subjects reflects the content of the main international guidelines on CSR reporting (ISO 26000, Global Compact, Guiding Principles of Human Rights and Business, the OECD Guidelines for multinational corporations, Global Reporting Initiative).
3. For each required topic, no specific indicators are proposed, thus providing companies with the liberty to select those most relevant to them.
4. A “comply or explain” approached is proposed: companies can choose to omit information on subjects non-relevant to their activity, but must instead provide an explanation for why they chose not to disclose this information.
5. According to the decree, a company’s report should disclose all actions taken by the company and its subsidiaries.
6. it states that a company’s report must be subject to verification by an independent third party (appointed by the executive director or chief executive), which must be accredited by Cofrac (French Committee of accreditation) or by any other accreditation body signatory to the multilateral recognition agreement established by the European coordination of accreditation bodies. This third party must then prepare a report certifying the quality of the company’s reporting and provide a “reasoned opinion” on the accuracy of information provided, and also (as mentioned above) on the explanations given by the company for any omitted data.
Updated on: 12.02.13