ESG 2025 Comparisons

In recent years, France has progressively embedded ESG considerations into its corporate governance and reporting framework. Yet, in the current global political and economic context, the European Union has appeared to slow down and even scale back some of its sustainability initiatives.

The Corporate Sustainability Reporting Directive (CSRD)

The first sustainability reports prepared under the EU Corporate Sustainability Reporting Directive (CSRD) were published by the largest-in-scope companies. Adopted and transposed into French law in 2023 (Ordinance No 2023-1142 of 6 December 2023), the CSRD harmonises sustainability disclosure across the EU through detailed European Sustainability Reporting Standards (ESRS). However, the EU Stop-the-Clock Directive and the February 2025 Omnibus proposal package (yet to be adopted) have since respectively postponed the application date for smaller companies and proposed to substantially ease reporting duties.

Since 2017, French law has required certain large companies (at least 5,000 employees in France or 10,000 worldwide) to adopt and publish a vigilance plan and a report on its implementation (ie, duty of vigilance), setting out reasonable measures to prevent serious human rights, health, safety and environmental risks, not only from the company’s own activities and those of its controlled entities, but also from the activities of subcontractors and suppliers. Recent case law has further shaped this framework, with an appellate decision involving La Poste (French postal service) – delivered for the first time by the specialised chamber of the Paris Court of Appeal on 17 June 2025 – and a first-instance judgment concerning the SNCF (French railway service) on 13 February 2025. These rulings confirmed that the courts only review the compliance and transparency of vigilance plans, while companies retain strategic autonomy and must demonstrate methodological rigour, traceability, and effective stakeholder dialogue.

The Corporate Sustainability Due Diligence Directive (CS3D)

In parallel, the Corporate Sustainability Due Diligence Directive (CS3D) was adopted by the EU in 2024 and must still be transposed into French law. It will extend vigilance obligations to more French companies (initially set to apply to companies with at least 1,000 employees and EUR450 million in turnover), and will create a dedicated supervisory authority. Its application has however been postponed to 2028 by the Stop-the-Clock Directive. The Omnibus proposal of February 2025, still under discussion, would substantially soften the regime by reducing the number of companies in scope, limiting due diligence mainly to direct partners, and easing assessment and stakeholder consultation requirements.

The Sustainable Finance Disclosure Regulation

In May 2025, the European Commission launched a call for evidence to review the Sustainable Finance Disclosure Regulation (the EU framework requiring financial institutions to disclose sustainability information) with a view to simplifying and strengthening the effectiveness of sustainable finance disclosures. The review aims in particular to clarify the product categories of financial products, reduce complexity and compliance costs, and ensure that sustainability information provided to investors is both comparable and reliable.

New French Legislation

At the national level, France has continued to adopt targeted ESG measures, including new legislation in 2025 to curb the environmental impact of fast fashion, building on earlier initiatives on waste reduction and the circular economy.

The year 2025 marked the first year of publication of sustainability reports under the CSRD by French companies. On average, CSRD sustainability reports from the CAC 40 (index of the 40 most significant stocks on the Euronext Paris exchange) dedicate 38% of their page count to environmental issues. Climate (ESRS E1) stands out as the most material topic, with all CAC 40 companies identifying at least one climate matter as material, and many disclosing transition plans (E1-1) and setting targets which aim to comply with the Paris Agreement, often validated by the Science Based Targets initiative (SBTi). This reflects both regulatory expectations and the largest companies’ relative maturity built through previous reporting frameworks. By contrast, other environmental issues such as pollution, water, the circular economy and especially biodiversity, were less frequently deemed material, with limited disclosures and very few transition plans or quantitative indicators. See Chambers Global Practice Guides Environmental Law 2025, France Trends and Developments for more on this topic.

In addition to the general ESG developments, combating misleading sustainability claims and greenwashing has become a clear supervisory priority in France and at EU level. Thus, in July 2025, the European Securities and Markets Authority (ESMA) sent out a reminder that all sustainability claims must be accurate, accessible, substantiated and up to date, warning against greenwashing. In France, the French Financial Market Authority (Autorité des marches financiers or AMF) echoed this approach. In December 2024, it updated its ESG doctrine (Position-Recommandation AMF 2020-03) to align with ESMA’s fund-naming Guidelines, requiring funds using ESG or sustainability terms to meet stricter asset and exclusion thresholds (ESMA, Guidelines on funds’ names using ESG or sustainability-related terms, 21 August 2024). In June 2024, it publicly disclosed a settlement with Primonial Reim, a French real estate investment management company, for misleading sustainability communications, underscoring its willingness to sanction inadequate or exaggerated ESG claims. The fight against greenwashing was also highlighted in the AMF action and supervisory priorities for 2025.

Furthermore, on 4 July 2025, the European Commission adopted a package of measures to simplify the EU Taxonomy, the EU’s classification system that defines which economic activities can be considered environmentally sustainable. Under this framework, companies must disclose the proportion of their turnover, capital expenditure (CapEx) and operating expenses (OpEx) linked to Taxonomy-eligible activities (ie, covered by the Taxonomy) and, among those, Taxonomy-aligned activities (ie, meeting technical screening criteria and not significantly harming other objectives). The reform aims to reduce administrative burdens while preserving core climate and environmental goals – companies are now exempt from reporting on activities representing less than 10% of turnover, CapEx or OpEx. Non-financial undertakings are also exempt from assessing the alignment of OpEx considered immaterial.

The Law on Climate

Environmental considerations have been progressively incorporated into the French Labour Code. Since the enactment of the Law on Climate (Law No 2021-1104, 22 August 2021), the powers of the works council (Comité social et économique or CSE) have been extended to include environmental matters, notably in the following circumstances:

• as part of the three recurrent consultations (strategic orientations, economic and financial situation, social policy and working conditions), the works council must now be informed on the environmental consequences of the company’s activity (Article L. 2312-17 of the Labour Code);
• when the works council is consulted on an ad hoc basis on a contemplated project impacting the general running of the company, the works council must now be informed and consulted on the environmental consequences of this project (Article L. 2312-8 II of the Labour Code); and
• in the absence of a precise definition of what is meant by “environmental consequences”, employers tend to consult the works council on the environmental aspects of the decisions affecting the general running of the company (eg, implementation of remote working, relocating, replacement of company vehicles, etc).

Sustainability and the Works Council

Following the adoption and transposition into French Law of the CSRD, since 1 January 2025, certain large companies have been required to inform and consult the works council on their sustainability. As part of the three recurring consultations, the works council must be consulted on sustainability information as well as the means of obtaining and verifying such information. The necessary information regarding sustainability, communicated by the employer through its economic, social and environmental database, provides the works council with an insight into the impact of the company’s activities on sustainability issues and how these issues affect the development of its business, results and situation.

The CS3D places a duty on companies operating in the EU to identify and address adverse human rights and environmental impacts within their operations, those of their subsidiaries, and their “chains of activities”.

Case Law Developments

French legislation on the Duty of Vigilance (Law No 2017-399, 27 March 2017) has a number of factors in common with the CS3D. The French duty of vigilance, introduced into the French Commercial Code in 2017, requires certain companies to draw up and implement a due diligence plan which aims to “identify risks and prevent serious violations of human rights and fundamental freedoms, the health and safety of individuals and the environment, resulting from the activities of the company… as well as from the activities of subcontractors or suppliers...” The new chamber of Paris Court of Appeal dedicated to “emerging litigation” has handed down three long-awaited decisions involving TotalEnergies, EDF, and Vigie Groupe (formerly Suez). These rulings provide important clarifications on the conditions for admissibility of these actions, in particular, on the interest in bringing the action, prior formal notice, pre-litigation dialogue, and the possibility of combining the claims with action to stop ecological damage. These rulings may provide an insight into how the EU and national courts will interpret similar requirements under the CS3D in the future.

Gender Balance in Governing Bodies

Regarding gender balance and equality, the framework was reinforced at both the national and EU levels.

Since the introduction of the Copé-Zimmerman Law (2011), French law already provides that the boards of listed companies or certain large companies (≥250 employees and ≥EUR 50 million turnover or balance sheet) must be composed of at least 40% women. With the transposition of the EU Women on Boards Directive through Ordinance No 2024-934 of 15 October 2024, this quota must include employee and employee-shareholder representatives, with the AMF designated as the competent authority to monitor compliance and publish annual disclosures for listed companies (see 2.1 Developments in Corporate Governance).

The French Loi Rixain (December 2021) requires companies with more than 1,000 employees to ensure that women account for at least 30% of senior executives and members of governing bodies from 2026, rising to 40% by 2029, with penalties for non-compliance. In addition, these companies must publish annual gender representation gaps among senior executives and governing bodies, and since March 2023, these figures must also be disclosed on the Ministry of Labour’s website.

Publication of First Sustainability Reports

In application of the CSRD in France, the first sustainability reports were published by large listed companies in 2025. They highlighted the strong involvement of boards of directors and a review of the missions of the audit committees, in co-ordination with sustainability committees where applicable. The AMF closely supported companies, announcing it would take a “constructive” approach in its supervisory review to foster gradual progress. As required by the CSRD, the reports were subject to statutory auditors’ limited assurance, and no major shortcomings were identified in the initial publications (see PwC, Assurance sur le reporting de durabilité, 2025).

“Say on Climate” Resolutions

In 2024, some issuers submitted “Say on Climate” resolutions – giving shareholders a vote on their climate strategy – although the number of companies decreased from previous years to six within the SBF 120 (the index of the 120 largest French listed companies whose stocks are most actively traded). More broadly, the AMF has encouraged companies to include a dedicated item on the agenda of the general meeting to present their climate strategy (without a vote), and the AFEP-MEDEF Governance Code similarly invites boards to report on this strategy to shareholders during annual shareholders’ meetings.

“Say on Governance” Resolution

A “Say on Governance” resolution was attempted in 2024 at TotalEnergies, seeking a consultative vote on the separation of the CEO and Chair roles, but the board refused to include it on the agenda even though the board was founded to take this decision, according to the urgent applications judge (juge des référés). No comparable new initiatives on ESG appear to have been observed in 2025 among SBF 120 companies.

AFEP-MEDEF Governance Code

Finally, in line with the AFEP-MEDEF Governance Code, ESG criteria continue to form an integral part of executive remuneration in listed companies, both as qualitative and quantitative performance indicators. This trend was confirmed by the IFA/Ethics & Boards Barometer published in December 2024, which reported that 92% of SBF 120 companies include climate or environmental (ESG) criteria in their executives’ variable remuneration, whether short or long-term. This reflects growing investor expectations for greater accountability of management in delivering on sustainability objectives.

In France, regulators and supervisory authorities have long played a proactive role in the ESG transition. The AMF began issuing ESG reporting recommendations as early as 2016 and has since combined supervision with a strategy of guidance and support. It publishes an annual report on corporate governance (including certain ESG matters), thematic reports on taxonomy, and recommendations on climate disclosures. In its 2025 supervisory priorities, the AMF confirmed that it would accompany issuers in the first application of the CSRD, adopting a pragmatic approach. Its 2023–2027 strategic orientations also emphasise improving the clarity and completeness of both financial and non-financial disclosures, through guidance, supervision and enforcement. The AMF is also at the forefront of the fight against greenwashing, having updated its ESG Doctrine in 2024 and taken enforcement action against misleading sustainability claims.

The H2A (Haute Autorité de l’Audit), which replaced the former H3C as the French audit regulator, is responsible for overseeing statutory auditors and audit quality (including sustainability audits, mandatory with the application of the CSRD). Pending the adoption of a European assurance standard for sustainability information, the H2A has issued guidance on the review of CSRD sustainability audits to clarify expectations for statutory auditors and ensure consistency across the market. The Banque de France, through its prudential authority (Autorité de contrôle prudentiel et de résolution or ACPR), integrates climate and sustainability risks into the supervision of banks and insurers, notably by monitoring their risk management and disclosure practices.

Under French and EU law, ESG regulation is set to affect companies across all sectors. Recent proceedings under the duty of vigilance have made clear that no industry is exempt, with companies from very different fields already facing formal notices. Particular scrutiny will apply to businesses with a significant environmental impact, especially those with high greenhouse gas emissions given strengthened disclosure obligations, as well as to companies whose activities create risks for human rights, whether by affecting local communities or their own employees. Several ESG requirements are cross-cutting, though scrutiny will be particularly intense for high-impact sectors.

Dedicated law on specific sectors might also be adopted, depending on political will (eg, oil, the fast-fashion industry, etc).

Geopolitical and political developments have a direct impact on ESG progress in France. At the EU level, debates around competitiveness and “regulatory burden” have led to calls for phased timelines and simplification of sustainability reporting and due diligence rules (CSRD and CS3D), which France supported for mid-sized companies. At the same time, political momentum around climate change, energy transition and gender equality remains strong, with legislative initiatives such as the Law on Climate (2021 cross-cutting reform aimed at accelerating the ecological transition, covering areas such as consumption, transport, housing, land use and biodiversity, while introducing new obligations for companies and sanctions for environmental harm) and the Loi Rixain continuing to drive implementation. Despite recent developments in the United States regarding diversity, the diversity policies of large French listed companies have not changed.

Key ESG developments in corporate governance for the coming year in France include the progressive entry into force of the CSRD for smaller companies.

This roll-out is expected to be accompanied by adjustments under the proposed Omnibus directive, which would reduce certain disclosure obligations.

At the same time, the CS3D, adopted at EU level in 2024, still needs to be transposed into French law, with the scope of obligations potentially narrowed if the Omnibus proposal is adopted.

On the social and governance side, the Loi Rixain will reach its first milestone in 2026, requiring companies with more than 1,000 employees to ensure that women represent at least 30% of senior executives and governing bodies, rising to 40% by 2029. This coincides with the implementation of the EU Women on Boards Directive, which was transposed into French Law in 2024. It further strengthens gender-balance obligations for listed companies in that, while the Copé-Zimmerman Law already imposed a 40% quota on shareholder-elected directors in listed companies and large companies, from 1 January 2027 employee-shareholder representatives (ARSA) will also be included in this calculation, and employee representatives (ARS) will, for the first time, be subject to a separate parity rule once more than two sit on the board.

There is also much discussion on the evolution of shareholders’ rights, particularly the ability to include resolutions on the agenda of general meetings.

The issues of directors’ expertise and training, particularly in AI and cybersecurity, are also a point of attention, and changes are being made in these practices.

Requirements Applicable to Listed and Unlisted Companies

In France, several governance and sustainability obligations apply regardless of whether a company is listed or not, since they are triggered by size thresholds. The CSRD, for instance, applies progressively to both listed and unlisted companies that meet balance sheet, turnover or headcount criteria, with large listed groups among the first to publish reports in 2025 (see 1.4 Governance Trends). The 2017 Duty of Vigilance follows the same approach: companies with more than 5,000 employees in France or 10,000 employees worldwide must prepare and publish a vigilance plan (notably, the first court decisions on the merit regarding vigilance obligations concerned unlisted companies), and the forthcoming CS3D will extend and implement vigilance obligations at EU level for both listed and unlisted companies.

Extra Requirements Applicable to Listed Companies

However, listed companies are subject to a more demanding governance framework. They must include additional information in the corporate governance report (included in the annual management report), and their shareholders vote on executive pay through mandatory “Say on Pay” resolutions. This vote covers the information disclosed by the company regarding corporate officers’ remuneration, which must notably present an equity ratio comparing executive pay with the remuneration of the average and median employee within the company.

Listed issuers are also required to establish an audit committee – a rule that also applies to other public-interest entities (such as banks and insurance companies) – which is responsible for monitoring the quality and integrity of sustainability reporting, overseeing the effectiveness of internal control and risk management systems relating to such reporting, and ensuring the statutory auditor’s independence in providing sustainability assurance.

Listed companies are also required to adhere to a corporate governance code on a “comply or explain” basis (in practice, most often the AFEP-MEDEF Code for large listed companies) including recommendations on certain ESG matters (directors’ training, ESG criteria in executive officers’ remuneration, presentation of the transition plan at the shareholders’ meeting). Finally, listed companies fall under the supervision of the AMF, which requires that all public disclosures, including ESG communications, be accurate, precise and fair, creating potential additional liability.

The 2019 French PACTE Act (Law No 2019-486, 22 May 2019) codified a principle initially developed by case law by providing that “the company is managed in its corporate interest”, while adding that it must also be managed “taking into consideration the social and environmental issues related to its activity”. This minimum standard applies to all companies and directors are under a best-efforts duty to consider the social and environmental impacts of the company’s activities. In practice, this means that boards and officers must be able to demonstrate that such considerations were duly taken into account; however, they are not required to prioritise them over other interests. A breach of this duty may give rise to directors’ liability, but a company decision cannot be annulled solely for failure to comply with this obligation.

Building on this baseline, ESG requirements increasingly shape the role and responsibilities of directors and officers in France. Under the CSRD, in-scope companies must explicitly describe in their sustainability reports the role of their administrative, management and supervisory bodies with respect to sustainability matters, as well as the expertise and skills of their members in this field. In listed companies, the board’s audit committee is given a particularly prominent role – it is responsible for monitoring the quality of sustainability information and must explain how it has contributed to the integrity of such disclosures. The ESRS adopted by the European Commission also require disclosure of the actions taken by the directors to ensure adequate due diligence on sustainability issues. While these standards clarify expectations, they expressly state that they do not expand the legal duties of boards beyond those already provided in existing legislation. In practice, directors are expected to develop appropriate ESG knowledge.

In listed companies, the AFEP-MEDEF Code recommends that board members receive training, if necessary, on the company’s business model and sector, including its social and environmental responsibilities, and particularly climate issues. Furthermore, investors closely scrutinise how directors and officers discharge these responsibilities, notably as ESG criteria increasingly influence the level of executive remuneration.

Directors’ responsibilities for ESG are also reinforced through the duty of vigilance, since vigilance plans must be prepared and implemented by the company’s corporate organs.

Directors have a general duty of care in the performance of their corporate office. The growing body of regulations and recommendations on ESG matters is gradually raising the standard of what is expected from a diligent director, and may incidentally be taken into account by courts in potential liability actions involving ESG issues. However, litigation based on directors’ or executive officers’ liability is rare in France, and there do not appear to be any reported cases where they have been held personally liable for failing to consider social or environmental impacts.

Regarding the composition of corporate bodies, French law requires the presence of employee representatives on the board of large companies (sociétés anonymes) – classified as more than 1,000 employees in France or 5,000 worldwide, with one or two directors depending on the board’s size – as well as employee-shareholder representatives when employees hold more than 3% of the share capital. As described above, gender-balance rules also play a central role. Also see 2.1 Developments in Corporate Governance regarding gender equality on the board of directors.

Since the 2019 PACTE Act, France has created two legal tools to embed social and environmental objectives into corporate forms.

First, companies of any form may adopt a raison d’être in their by-laws, setting out the principles and long-term purpose, beyond profit-making, that guide their activities. Once enshrined in the by-laws, this becomes binding on directors, although failure to comply does not invalidate corporate acts.

Second, companies may choose to become mission-driven companies (sociétés à mission). This status, which requires a by-laws’ amendment approved by shareholders, entails defining a raison d’être, setting specific social and environmental objectives, and creating a dedicated mission committee (including at least one employee) to monitor their fulfilment. Compliance is reviewed annually and is subject to verification by an independent third party. If objectives are not met, the commercial court may order removal of the société à mission designation. Companies in various sectors have adopted this status (eg, Danone, Ecotone, and Omie & Cie in food; Ramsay Santé in healthcare; Vranken-Pommery Monopole in beverages and wines; Mirova in financial services; and FREY in real estate). Also, while most sociétés à mission are SMEs, some larger companies have also adopted this status; among listed issuers, Danone remains the only CAC 40 company to do so.

Several companies have combined the status of mission-driven companies with B-Corp certification (eg, Danone, Mirova, FREY, etc).

ESG obligations are increasingly influencing the relationship between French companies and their shareholders. Enhanced disclosure duties under the CSRD mean that shareholders now receive far more detailed information on the company’s ESG strategy, risks and performance. Shareholders are also increasingly invited to engage with these issues in general meetings, through “Say on Climate” consultations or dedicated agenda items on sustainability strategy, even when no vote is required (see 1.4 Governance Trends and 6.2 Climate Activism).

Moreover, investors scrutinise how boards and executives integrate ESG into governance, notably through the link between ESG performance and executive remuneration (as recommended by the AFEP-MEDEF Code), and may challenge boards where commitments appear insufficient. Litigation based on the duty of vigilance has also opened new avenues for stakeholders, including shareholders and trade unions, to hold companies accountable for human rights and environmental risks in their operations and supply chains.

See 1.1 General ESG Trends.

EU Reporting Duties

At EU level, the Sustainable Finance Disclosure Regulation (SFDR) imposes disclosure duties on financial market participants – such as asset managers, institutional investors and other providers of financial products – regarding sustainability risks, principal adverse impacts and the ESG characteristics or objectives of their products. The EU Taxonomy Regulation establishes common criteria to determine when an economic activity can be considered environmentally sustainable. Issuers must disclose in their sustainability reports the proportion of turnover, CapEx and OpEx linked to taxonomy-eligible and aligned activities, while financial institutions must disclose the degree of alignment of their portfolios. In addition, sustainability requirements are embedded in delegated acts under the AIFM, UCITS and MiFID II frameworks (see Commission Delegated Regulations of 21 April 2021), which require investment firms and asset managers to integrate sustainability risks and clients’ sustainability preferences into governance processes, product design and suitability assessments.

National Reporting Duties

At national level, Article 29 of the 2019 Energy and Climate Law (Law No 2019-1147, 8 November 2019) significantly enhances ESG reporting duties for financial institutions. It requires asset managers and insurers to disclose their overall investment strategies, taking into consideration sustainability matters across their portfolios. Institutions must provide qualitative and, where relevant, quantitative information on how ESG factors are integrated, how portfolio alignment with climate objectives is assessed, and what measures are taken to mitigate negative externalities. In particular, they must disclose their alignment strategies with international climate objectives set by the Paris Agreement, as well as their alignment strategies with long-term biodiversity objectives. In addition, France has introduced two state labels — the ISR (socially responsible investment) and Greenfin labels – to certify sustainable investment products and guide investors. The AMF has also made sustainable finance a supervisory priority: through its “ESG Doctrine” (AMF Position 2020-03, updated in 2024 to align with ESMA fund-naming Guidelines), it requires that ESG disclosures be clear, accurate and not misleading, and that funds using ESG or sustainability terms meet minimum thresholds and exclusions. The AMF has further announced that the fight against greenwashing and the supervision of sustainability disclosures will remain among its enforcement priorities.

Access to sustainable finance in France is steadily expanding for companies, though it remains uneven across firm size. In 2024, assets managed under funds classified as SFDR Article 8 (promoting environmental or social characteristics) and Article 9 (targeting sustainable investment objectives) reached EUR2.7 trillion, representing nearly 60% of assets under management in France. These classifications indicate that the funds actively direct capital toward companies that meet sustainability criteria, with Article 9 funds requiring a higher standard of alignment with measurable sustainability objectives.

French corporations also benefit from access to a range of sustainable financing instruments, notably green bonds, sustainability-linked bonds, and sustainability-linked loans. France is among the EU’s largest issuers of sustainable debt, with volumes more than doubling in recent years. Large listed companies, in particular, are frequent issuers of green bonds to finance renewable energy projects, energy efficiency measures, or sustainable infrastructure. Banks have also developed sustainability-linked loan facilities, where the cost of capital is tied to ESG performance indicators.

However, access remains more challenging for small and medium-sized enterprises, which often face higher compliance costs and limited resources to meet disclosure and ESG reporting standards.

The energy transition for companies with exposed activity involves difficulties that may arise from the presence of investors with very different objectives (anti-ESG versus green funds) or the difficulty of finding serious buyers for critical assets.

In France and the EU, one of the main challenges lies in the limited availability of consistent and reliable data, particularly as CSRD scope reductions and phased reporting will leave disclosure gaps for several years. Asset managers are expected to report more comprehensively to their investors while often relying on incomplete information from issuers. At the same time, regulators are strengthening supervision to address risks of greenwashing, while some issuers and investors adopt a more cautious approach, sometimes referred to as “green-bleaching”. Finally, market participants must also navigate diverging trends, with Europe maintaining a strong ESG focus while parts of the US market show increasing resistance to ESG considerations, adding complexity for global strategies.

Considering that the ESG regulatory framework in France has progressively evolved for more than two decades – with the first mandatory ESG disclosures introduced as early as 2001 under the New Economic Regulations Act (Nouvelles Regulations Economiques – NRE, Law No 2001-240, 15 May 2001) – what is happening in France can hardly be called a transformation of soft law into hard law. Rather, France has long relied on statutory obligations to frame corporate ESG responsibilities.

This trajectory was reinforced in 2017 with the introduction of the EU Non-Financial Reporting Directive (NFRD) transposed in all EU member states, which required large companies to disclose detailed non-financial information, including on social and environmental matters. The NFRD has now been replaced by the CSRD, which considerably extends the scope of companies subject to reporting obligations, broadens the range of ESG information to be disclosed, and requires third-party assurance. This shift reflects a clear move towards stricter and more standardised sustainability disclosure requirements, as part of the evolution of hard law rather than a transformation of soft law.

As described above, since 2017 the Duty of Vigilance Act has already required large companies to adopt, publish and implement vigilance plans to identify and mitigate serious risks in their operations and supply chains. With the adoption of the CS3D, which is awaiting transposition, this framework will soon be extended at EU level, with lower thresholds and supervision entrusted to national authorities.

Alongside these statutory obligations, French case law has long imposed on directors a duty to act “prudently and diligently” (eg, Cass. com., 30 March 2010, Crédit Martiniquais). The “normally diligent director” standard inevitably evolves as new sustainability and vigilance obligations are imposed on companies. Following the PACTE Act, directors are now expected to demonstrate that they have taken ESG risks into account in their decisions, documented their reasoning, and ensured that they are adequately informed and trained on such matters. A failure to do so may expose them to liability if damage arises.

Hence, it is true that soft law recommendations pave the way for the evolution of the judicial interpretation of these directors’ duties regarding ESG matters. The AFEP-MEDEF Code already recommends that board members receive adequate training and request all relevant information, including on ESG issues, to participate meaningfully in board deliberations. Similarly, the OECD/G20 Corporate Governance Principles emphasise directors’ competence and ongoing training. These recommendations are now reinforced by legislative and regulatory texts, as well as by supervisory authorities, so that the “duty of diligence” increasingly overlaps with a duty of competence.

This reflects a broader trend, driven by vigilance obligations, the forthcoming CS3D, and enhanced disclosure under the CSRD, combined with the evolving judicial interpretation of directors’ duties.

In France, due diligence obligations in the value chain are significantly increasing. As described above, the French Duty of Vigilance law already requires large companies to establish, implement and publish vigilance plans to identify and prevent serious human rights, health, safety and environmental risks arising from their own activities, those of controlled entities, and the operations of established subcontractors and suppliers.

At the European level, these requirements will be expanded under the CS3D, adopted in 2024 and now awaiting transposition into French law. The directive lowers the applicability thresholds compared to those of the French regime, extends due diligence obligations across the value chain, and introduces supervision by national authorities empowered to impose sanctions. Its entry into force has been delayed to 2028 following the Stop-the-Clock Directive, and its scope may still be modified under the ongoing Omnibus proposal, which seeks to limit the scope of obligations, particularly regarding indirect business partners.

The French Duty of Vigilance Act has already had an impact on how companies conduct their activities and select their suppliers and subcontractors, and this trend is expected to be reinforced by the forthcoming CS3D for in-scope companies. Companies are increasingly attentive to human rights, environmental and governance risks in their value chains, which influences supplier screening and contractual arrangements.

That said, there does not appear to have been a disproportionate increase in litigation based on the Duty of Vigilance Act. Recent decisions also suggest that the courts will not step into the role of companies in designing vigilance plans, but will instead focus on the methodology, transparency and diligence with which they are prepared and implemented.

ESG increasingly plays a role in M&A transactions in France, with dedicated ESG due diligence becoming more common, particularly in sensitive sectors. Except in certain specific cases, however, ESG considerations are not yet a deal breaker. ESG strategies, on the other hand, are increasingly a driver of investment or divestment decisions.

See 2.2 Differences Between Listed and Unlisted Entities.

CSRD/ESRS (Disclosure Obligation)

Under the CSRD, in-scope companies must report how they address climate, including the key features of a climate-transition plan (ESRS E1-1) where climate is considered to be material following the double materiality assessment (ie, taking into account both the company’s impacts on the environment and the environment’s financial impacts on the company). The standards aim to provide decision-useful, comparable information, not to impose an emissions-reduction outcome. Hence, targets are tracked annually; companies must describe assumptions, uncertainties and mitigation actions; and (post-2030) targets are to be periodically re-assessed. When a transition plan is adopted, companies must also explain how it is embedded in and aligned with the undertaking’s overall business strategy and financial planning.

The EC has also introduced transitional reliefs. During the first year, undertakings may omit the anticipated financial effects of environmental topics. Undertakings with fewer than 750 employees may defer reporting on Scope 3 GHG emissions.

CS3D (Obligation to Adopt and Put Into Effect a Climate Plan)

Beyond disclosure, the EU’s 2024 CS3D requires in-scope companies to adopt and put into effect, on a best-efforts basis, a climate-change mitigation transition plan aligned with EU climate-neutrality/Paris goals (with oversight by national authorities). This is a substantive obligation (prepare/implement a plan), complementing the CSRD’s reporting duty. France still has to transpose the CS3D.

However, the Stop-the-Clock Directive, already transposed in France, has postponed the application of CS3D obligations to a progressive schedule starting in 2028.

Further, the Omnibus proposal (2025), yet to be adopted, significantly weakens this requirement. The obligation to put these plans into effect is replaced by a clarification that this transition plan includes outlining implementing actions (planned and taken). The EU Council further suggests limiting the requirement for companies to adopt a climate transition plan for the mitigation of climate change, and empowering supervisory authorities to advise companies on the design and implementation of such plans. To further reduce burdens and provide companies with sufficient time for adequate preparations, the Council has also postponed the obligation to adopt transition plans by two years.

Sustainability claims can have adverse effects: they can mislead consumers about the environmental merits of a product (ie, so-called “greenwashing”), which can moreover affect fair competition on the market. Public authorities have therefore taken recent measures to better define the legal framework applicable to them.

At the national level, the so-called AGEC Law (Law No 2020-105 of 10 February 2020 on anti-waste and for a circular economy) and the 2021 French Climate Law (Law No 2021-1104 of 22 August 2021 on combating climate change and strengthening resilience to its effects) have notably prohibited advertisers from claiming in an advertisement that a product or service is carbon neutral (or equivalent) without complying with a specific framework as defined by Decree No 2022-539 of 13 April 2022. The Ministry of Economy has published guidelines to help companies comply with the national legal framework.

At the EU level, Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 has recently amended Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition. It aims to provide more transparent information for consumers and make companies more responsible in their environmental communication on the market. It notably provides for a definition of “environmental claim” and “sustainability label” and provides a legal framework applicable to them.

Directive (EU) 2024/825 must be transposed into national law by 27 March 2026. In France, it will be transposed through the next draft law on various provisions for adaptation to EU law (so-called “DDADUE”), which is examined by the Conseil d’Etat when this document is drafted.

Moreover, Regulation (EU) 2024/3005 of the European Parliament and of the Council on the transparency and integrity of ESG rating activities was adopted on 27 November 2024 and will apply on 2 July 2026. This regulation aims to strengthen confidence in sustainable investments, as well as the reliability and comparability of ESG rating activities. It notably provides that ESG rating providers established in the EU will have to meet certain conditions involving, among other things, authorisation from ESMA.

Further developments should be expected at the EU level, but remain uncertain at this stage. On 20 June 2025, the European Commission announced its intention to withdraw the Green Claims Directive that it proposed in March 2023 to protect consumers against misleading environmental marketing practices, on the ground that the procedures provided by this draft would be overly complex and costly.

In France, the AMF supervises ESG disclosures made by listed companies and monitors the accuracy of sustainability-related communications, including the use of marketing claims, with a particular focus on preventing greenwashing. The AMF also oversees asset managers and investment products, ensuring compliance with EU rules such as the SFDR and the Taxonomy Regulation.

In addition, once the CS3D is transposed, a dedicated national supervisory authority will be designated to oversee compliance with the new due diligence and climate transition plan obligations. The precise authority has not yet been formally appointed.

See also 5.5 Enforcement and 6.1 Instruments for ESG Litigation.

In France, civil liability may be incurred both by companies and their directors where ESG disclosures are misleading or incomplete. Liability is assessed under the general tort law framework and remains strictly subject to the demonstration of the classic triptych:

• a wrongful act (faute);
• damage (dommage); and
• a causal link (lien de causalité).

The wrongful act may consist of any misconduct, such as failure to comply with or improper performance of a legal obligation, or disregard of a director’s duty. The claimant may be any person suffering direct damage, and it is not necessary that the harm relates specifically to a person expressly protected by law, provided that the claimant can demonstrate a legitimate interest to sue (intérêt à agir), ie, a personal and direct stake in the claim. Finally, liability requires that the damage be directly caused by the wrongful act.

Shareholders may bring actions on behalf of the company (ut singuli/derivative actions) to pursue directors’ liability, while individual actions by shareholders are only possible if they suffer distinct personal damage (distinct from the company’s damage) – something rare in practice, except in certain cases of false or misleading information. Third parties (other than shareholders) must establish a particularly serious and intentional fault that is incompatible with the normal exercise of directors’ functions (faute séparable des fonctions).

With the adoption of the CSRD, companies and directors are expected to demonstrate that they acted diligently in preparing sustainability disclosures and in implementing related commitments. Courts may take into account compliance with the ESRS, the documentation of assumptions and uncertainties underlying forward-looking information, and exchanges with sustainability auditors. The existence of errors in sustainability reporting will not, in itself, automatically establish liability, provided companies rectify material errors and update estimates as required by the standards.

For listed companies and financial market participants, the AMF can impose administrative fines for late, incomplete or misleading disclosures, including sustainability claims. These sanctions can be substantial, reaching up to EUR100 million or ten times the profit derived from the breach. The AMF may also order corrective measures or the publication of the infringement, often resulting in reputational consequences.

From an employment law standpoint, failure to properly inform and/or consult the works council on ESG-related topics may give rise to legal and financial sanctions, which mainly include fines. In particular, an action hindering the proper running of the works council may be regarded as a criminal offence of obstruction known as délit d’entrave which is punishable by a fine of up to EUR37,500 against the company (as a legal person) and by a fine of up to EUR7,500 against the representative of the company (as a natural person). The works council may also initiate legal proceedings before the judicial court to compel communication of the relevant information.

See also 6.1 Instruments for ESG Litigation.

In 2025, the first CSRD sustainability reports were published by the largest French companies. Statutory auditors did not identify any major shortcomings at this stage, but issuers frequently reported the significant challenges they encountered in meeting the new requirements. Both the AMF and auditors have accompanied this first wave of implementation with a supportive approach, emphasising gradual improvement.

For companies that were already subject to the obligation to publish a non-financial performance statement under the NFRD, the CSRD mainly represents a deepening and standardisation of prior practices. By contrast, for large unlisted companies and listed SMEs, which will enter into scope in later years, the new sustainability reporting represents a very substantial change in disclosure obligations. The transition therefore raises significant challenges, including the need to build reliable data-collection systems across value chains, strengthen internal controls, and develop board and management expertise in sustainability matters. Over the coming years, progress will depend on companies’ ability to adapt their governance, resources and methodologies to the more detailed and assured reporting framework introduced by the CSRD.

In France, bringing ESG-related cases against companies is possible, but it requires reliance on general and sector-specific legal tools rather than a dedicated “ESG litigation” regime. The main avenues are as follows:

• Civil liability (French Civil Code, Article 1240) – Under general tort law, a claimant must establish misconduct (faute), damage, and a causal link between the two. A breach of a statutory ESG-related obligation may constitute misconduct and ground liability for the company or its directors (see 2.3 Role of Directors and Officers). It should be noted, however, that directors are rarely held liable.
• Consumer actions (misleading practices) – Companies may be held liable if they commit to ethical or environmental standards publicly but fail to comply with them, leading consumers to claim they were misled (Articles L 121-2 to 121-5 and L 132-1 to L 132-9 French Consumer Code).
• Competitor actions (unfair competition) – Ethical commitments are often promoted as a reputational advantage. If they are breached, competitors may argue unfair competition under Article 1240 of the Civil Code, provided they can show loss of clientele resulting from the misleading ESG claims. Evidence may be supported by consumer associations demonstrating that customers’ choices were influenced by such commitments.
• Listed companies (disclosure obligations) – For listed companies, publishing false or misleading information concerning ESG matters can amount to market abuse under the EU Market Abuse Regulation (MAR). This may trigger sanctions by the AMF and litigation before civil courts under tort law.
• Criminal law – French criminal law provides for environmental offences under the French Environmental Code (eg, water pollution, harm to protected species, unlawful operation of classified facilities, or illegal waste management), which may trigger the criminal liability of both the company and its directors. In addition, the offence of endangerment of life (French Criminal Code, Article 223-1) could apply in an ESG context where a company knowingly exposes employees or local residents to serious risks, such as toxic substances or asbestos, while the 2021 Climate and Resilience Law introduced the crime of ecocide for severe and lasting damage to ecosystems.

Under French law, NGOs and activists play a role in ESG matters, both as litigants and as engaged shareholders. Several NGOs have initiated vigilance plan lawsuits against large corporates, including not only energy groups such as TotalEnergies but also major retailers (eg, Casino for deforestation risks in supply chains) and banks (eg, BNP Paribas for fossil fuel financing). Employee trade unions also frequently rely on vigilance obligations to launch litigations against in-scope companies (eg, La Poste, Teleperformance, XPO Logistics, Yves Rocher, etc).

Regarding listed companies, several NGOs have also increasingly used shareholders’ rights to influence companies on ESG matters, including during general meetings: for example, in supporting or filing Say-on-Climate resolutions (eg, at TotalEnergies, Vinci, Engie, etc); by opposing climate transition plans submitted for advisory vote by companies; by asking written or oral questions (eg, the Forum pour l’Investissement Responsible annually submits written questions to all SBF 120 companies); and by writing letters requesting companies to undertake ESG commitments.

On a different front, it should be noted that NGOs are also an important party to consider before the administrative courts in France. They have indeed filed cases in order to obtain measures from administrative courts to compel the French State to take further action on environmental matters, especially in the field of climate change (Paris Administrative Tribunal, 22 December 2023, Oxfam France, No 2321828) and plant protection products (Paris Administrative Court of Appeal, 2 December 2025, Association Notre Affaire à tous, No 23PA03881).

Several NGOs and consumer associations have brought actions against large companies for deceptive business practices under the Consumer Code. For example, TotalEnergies has faced litigation in France regarding allegedly misleading advertising campaigns presenting its activities as aligned with climate goals, while continuing to expand fossil fuel projects (case initiated in 2022 before the Paris Judicial Tribunal). These claims are based on the argument that public ESG commitments which are not honoured mislead consumers in practice.

Regulatory enforcement – the AMF has announced that greenwashing is one of its supervisory priorities, and continuously reviews the sustainability disclosures of asset managers and listed companies.

“Green hushing” and “green bleaching” – while there are no public cases as yet in France explicitly labelled under these terms, both practices are under scrutiny. “Green hushing” (withholding sustainability information) may conflict with disclosure obligations under the CSRD or MAR for listed companies.

From a social aspect, the DDADUE Law, dated 30 April 2025, has extended the scope of class actions in labour law. Previously limited to combating discrimination and protecting personal data, class actions may now be brought in respect of any “breach [by an employer] of its legal or contractual obligations”. Such actions could be brought forward by representative trade unions and, under certain conditions, approved associations.