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Corporates and Non-Financial Actors: ESG Challenges
ESG challenges facing corporations and non-financial economic actors. Covers climate risks, social responsibilities, and governance practices.
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Questions
Which companies are subject to the duty of vigilance law in France?
The law applies to joint-stock companies that employ, at the close of two consecutive fiscal years, at least 5,000 employees in France or 10,000 employees including foreign subsidiaries. According to estimates from NGOs CCFD-Terre Solidaire and Sherpa, approximately 260 to 300 French companies are affected.
What is the impact of the European CS3D directive on French law?
The European CS3D directive, adopted in May 2024, lowers the thresholds to include more companies (1,000 employees or EUR 450 million in revenue) and introduces administrative sanctions of up to 5% of turnover. It also requires a climate transition plan, which is absent from French law.
What is the first mandatory element of the vigilance plan under French law?
The first mandatory element of the vigilance plan is a risk mapping exercise designed to identify, analyze, and prioritize risks of serious harm to human rights, health and safety, and the environment. This mapping is essential for assessing risks throughout the value chain.
What is a major limitation of the French duty of vigilance law?
The absence of an official list of companies subject to the law, a dedicated administrative supervisory authority, and financial penalties weakens its effectiveness. According to the Duty of Vigilance Radar, a significant proportion of companies had not published a plan in 2020 and 2021.
The French duty of vigilance law imposes financial penalties for non-compliance.
The Constitutional Council struck down the civil fine initially provided for in 2017, deeming its scope too broad and indeterminate. The only available remedy is standard civil liability, with the burden of proof resting on the victims. No financial penalty has been imposed to date.
The European CS3D directive requires a climate transition plan aligned with the 1.5°C target.
The CS3D directive introduces a mandatory climate transition plan aligned with the 1.5°C target, which is an innovation compared to French law, which does not cover this aspect. However, this obligation could be removed by the Omnibus directive proposed in December 2024.
Categorize items by dragging them to the appropriate zones
Items to categorize:
Risk management
Corporate governance
The elements can be classified according to their role in governance (board oversight) or in risk management (mapping, assessment). This classification shows how the law integrates these two essential dimensions.
Landmark decision on the duty of vigilance in France
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The La Poste case, with a decision rendered on December 5, 2023 by the Paris Judicial Tribunal and upheld by the Court of Appeal on June 17, 2025, established that the duty of vigilance imposes qualitatively demanding obligations of means. The tribunal ordered La Poste to supplement its vigilance plan on four points, demonstrating substantive judicial review of plan quality.