Introduction

Scope of application

Compliance program

Protection of whistleblowers

Audit and sanctions

Rules arising from the Sapin II Law

EU law

French law

Rules derived from competition law

Sapin II Law/Competition

Scope ratione personae

Scope ratione materiae

Scope

Development of plan

Measures included in plan

Inclusion in management report

Vigilance plan

Injunctions

Civil liability

Sanctions

Duty of vigilance (devoir de vigilance)

CSR programs

Reporting

Communication

Reporting and communication

Judicial sanctions

Risk to reputation, strategy and stability

Corporate Social Responsability (CSR)

Middlenext Code

IFA Corpus

AFEP - MEDEF Code

Types

Principles of governance

Principles incorporating CSR values

Principles

Comply or explain

Binding force

Private codes of conduct

Compliance

Commitment to a CSR model obliges undertakings to respect a certain moral and ethical code in relation to the obligations they have imposed on themselves as part of their corporate social responsibility in terms of working conditions, human rights and environmental protection. In effect, compliance with CSR standards means communicating an image that is respectful of human and moral values, and mi …

From risk to reputation to responsible investment

Commitment to a CSR model obliges undertakings to respect a certain moral and ethical code in relation to the obligations they have imposed on themselves as part of their corporate social responsibility in terms of working conditions, human rights and environmental protection. In effect, compliance with CSR standards means communicating an image that is respectful of human and moral values, and mindful of the need for constant improvement. This can be a powerful marketing asset, since the undertaking must communicate and inform in a transparent and responsible way about its practices and commitments. Failure to fulfill this duty exposes the company to a risk of damage to its reputation in the eyes of the general public, and more particularly its stakeholders.

Environmental and consumer protection associations, for example, are especially attentive to practices  greenwashing  practices, which enable undertakings to use a “green label” for purely marketing purposes. Greenwashing consists in giving a false impression of corporate social responsibility commitments in order to benefit from the positive image associated with sustainability, without actually implementing any meaningful actions. By intentionally or unintentionally exaggerating the reality of their social or environmental commitments, undertakings and their directors can be exposed to liability. The authenticity of CSR commitments can be denounced by associations, which will not hesitate to call undertakings to order publicly and denounce their impact on climate change , or even to call for boycotts of their products or services, which can ultimately prove damaging to sales . The financial implications of greenwashing can be substantial. Investors are increasingly vigilant about the sustainability of the undertakings in which they invest. An undertaking caught in the act of greenwashing can see its stock market rating plummet and its ability to raise funds diminish. CSR has become a major issue in corporate finance: it is now vital to be able to demonstrate a “green” profile in order to raise funds.

The United Nations has defined responsible investment as a strategy and practice of taking environmental, social and governance (ESG) issues into account in investment judgments and commitment. First put forward by entrepreneur John Elkington , ESG criteria  are used to assess an undertaking's societal contribution to its stakeholders and the environment. ESG criteria include:

-  governance - which relates to the way in which the undertaking is managed, administered and controlled, including: transparency of executive pay; anti-bribery and corruption measures; the presence of an audit committee; the management structure; the role of shareholders; gender equality and independence of the board of directors and management.

The United Nations Principles for Responsible Investment set out commitments for taking ESG issues into account in investment analysis and decision-making processes.

Investment funds are committed to: being active investors who take ESG issues into account in their investor policies and practices; requiring entities in which an investment is made to publish appropriate information on ESG issues; promoting acceptance and application of the Principles among asset management players; working together to increase effectiveness in applying the Principles; and reporting individually on their activities and progress in applying the Principles.
Socially responsible investment (SRI) helps to minimize risk by anticipating and preventing crises that could damage an company's reputation and cause share prices to fall dramatically. SRI funds accounted for almost half of the European fund management market in 2023. SRI funds adopt several types of investment strategy. Some consist of selecting the best undertakings in each sector, without excluding any (“best in class”), while others exclude undertakings that do not meet minimum socio-environmental criteria. These exclusions may be sector-based (alcohol, tobacco, arms, GMOs, nuclear, etc.) or normative (non-compliance or non-ratification of international treaties and conventions). They can also seek to influence undertakings through shareholder rights in order to compel them to improve their ESG practices, or invest in undertakings active in sectors linked to sustainable development (climate change, renewable energies, water, etc.). Lastly, funds may choose to invest in unlisted undertakings striving to generate a measurable social or environmental impact .

The Oxford English Dictionary defines greenwashing  as 1) misleading] (the public) or countering (public or media concerns) by falsely representing a person, company, product, etc., as being environmentally  responsible; 2) misrepresenting (a company, its operations, etc.) as environmentally responsible.

The French Larousse dictionary defines greenwashing as the deceptive use of arguments based on good ecological practices in marketing or communications operations.

See notably, the campaign against fast fashion, denouncing major brands for practices that run counter to environmental protection and human rights, which led, on 14 March 2024, to the French National Assembly unanimously voting in favor of a bill to limit the environmental impact of textiles.

There are a number of sites that provide a list of criteria to help consumers identify which brands should be boycotted for their anti-CSR and eco-responsible practices: In France for example https://frippy.co/fr/blog/les-marques-a-boycotter

ELKINGTON, Cannibals with forks, New Society Publisher, 1998.

https://greenly.earth/fr-fr/blog/guide-entreprise/criteres-esg-definitions-et-enjeux#anchor-2. ESG criteria are not 100% reliable. In effect, ESG ratings are based on the average performance of companies operating in the same sector. However, each rating agency uses its own methodology and measurement indicators. The lack of standardization makes comparisons between undertakings in the same sector sometimes impossible.

https://greenly.earth/en-gb/blog/company-guide/esg-criteria-what-you-need-to-know

Compliance

139. From risk to reputation to responsible investment

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Les notions juridiques connexes

139. From risk to reputation to responsible investment

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Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise