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

From the outset, Middlenext has considered social and environmental issues to be an integral part of corporate strategy. The ever-increasing interventionism by the legislator in this area has reinforced the need to integrate these principles into the codes of conduct of all operators. Civil society now expects businesses to communicate more clearly on how CSR has been placed at the heart of their policies. The Middlenext Code sees CSR above all as a response to growing exogenous pressures and changing social demand for a more humane, supportive and environmentally-friendly form of economic development . It also takes the view that the formalization of a CSR commitment in a code of conduct offers a number of advantages: it ensures that all areas of opportunity and/or risk linked to sustainable development have been identified; it ensures that the action taken is closely aligned with the company's strategy and business objectives; and it makes clear to third parties the actions taken to consolidate economic and financial performance and ensure the company's “social license to operate”. These codes must now take into account ESG (environmental, social and governance) criteria, depending on the undertaking's sector of activity. Environmental issues relate to the use of raw materials, chemicals and energy, carbon footprint, water, air and soil pollution, and so on. Social and societal issues concern wages, working conditions (health and safety), human rights in the workplace, and compliance with the ILO's Basic Principles  (abolition of forced labor, elimination of child labor, discrimination, freedom of association, and the undertaking's commitment to civil society). Finally, governance and ethical issues relate to the separation of powers within the undertaking's management, relations with shareholders, compliance with market rules and local and international legislation (corruption, insider trading, lobbying, etc.). The Middlenext Code also calls on undertakings to set up a CSR committee, tasked with reflecting on value sharing and, in particular, on the balance between the level of pay for all employees, remuneration for the shareholder's risk-taking and the investments needed to ensure the undertaking's long-term viability.

In addition, recent European initiatives in the field of sustainability, reflected in the adoption of directives on the publication of sustainability information by undertakings (CSRD - corporate sustainability reporting directive)  and on the duty of care of undertakings (CS3D - corporate sustainability due diligence directive) , have led the IFA working group to identify nine key areas with actions to be implemented in the short term and avenues of reflection for advice in the short and medium term.

- In its first area of focus, the IFA encourage board members to learn about ESG issues on their boards.
- In the second, it calls for a review of the composition of the board of directors and its committees, and the organization of its work. Board members should now have the appropriate skills to deal with sustainability issues, integrate the consideration of stakeholder interests into the work of the board, and include sustainability issues in the assessment work of the board.

- The third priority is to anticipate the impact of implementing the new transparency requirements. The IFA recommends “ensuring that the undertaking has a suitable action plan not only to produce sustainability information with a sufficient level of reliability (compliance), but also to adapt the undertaking's management tools to underpin the decision-making process”. It also recommends “ensuring that the undertaking has put in place systems that enable material sustainability impacts, risks and opportunities to be identified on an ongoing basis (dual materiality analysis) across the entire value chain”.

- The aim of the fourth is to provide the company's board members with the information they need to make strategic decisions, using sustainability management tools. Among the information that is considered important are the mapping of impacts, risks and opportunities and the corresponding management systems, a dashboard for monitoring material sustainability issues, the results of the corporate due diligence procedure, information on the monitoring and evaluation of the effectiveness of internal control systems and on sustainability impacts, risks and opportunities, an annual update of climate and biodiversity pathways, sector analyses and external assessments performed by rating agencies.

- The fifth area involves overseeing the management of sustainability impacts, risks and opportunities. Boards of directors must monitor the due diligence process and report on its implementation, as well as monitor the updating of risk maps integrating sustainability issues (impacts, dependencies, risks and opportunities) by tracking weak signals and the level of support.

- The sixth task is to guide the undertaking's strategy and monitor its implementation, taking into account sustainability issues. The sustainability statement should include information on the current and potential repercussions of material impacts, risks and opportunities on the undertaking's business model, value chain, strategy and decision-making process. It should also include indications of how the company has responded or plans to respond to those impacts.

- The purpose of the seventh is to put the appointment of an independent, external sustainability auditor to the vote of the Annual General Meeting.

- The eighth stage involves reporting to shareholders, the markets and other stakeholders on the company's strategy, development model, consideration of significant non-financial issues and long-term outlook.

- The ninth priority is to ensure that management interests are aligned with the company's impact strategy, and to manage material risks, notably through the introduction of financial incentives.

Lastly, the AFEP-MEDEF Code now stipulates that, on the recommendation of Executive Management, the Board of Directors is to determine multi-year strategic orientations in terms of social and environmental responsibility. General management presents the board of directors with a plan of action for implementing this strategy, and the timeframes within which these actions will be carried out. Executive management is required to report annually to the board on the results achieved. In the case of climate protection, this strategy must be accompanied by clear objectives defined for different time frames. Each year, the board must review the results obtained and decide whether to adapt the action plan or amend the objectives, particularly in light of changes in the undertaking's strategy, technologies, shareholder expectations and the economic capacity to meet them. At least every three years, or in the event of any significant change in strategy, the climate strategy and the main actions undertaken to this effect must be presented at the Annual General Meeting.

https://www.middlenext.com/IMG/pdf/cahier_isr_et_dev_durable_vf.pdf.

Directive (EU) No 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive No 2004/109/EC, Directive No 2006/43/EC and Directive No  2013/34/EU, as regards  corporate sustainability reporting.

Directive No 2024/1760 on corporate sustainability due diligence and amending Directive No 2019/1937 and Regulation No 2023/2859, published in OJ of 5 July 2024.

146. Consideration of environmental, social and governance issues