ESG 2024

Last Updated November 12, 2024

France

Trends and Developments


Authors



Signature Litigation AARPI is a specialist firm handling major, high-value litigation, arbitration and regulatory investigations. From offices in London, Paris, Frankfurt and Gibraltar, it handles multi-party disputes stretching across multiple jurisdictions and acts for numerous worldwide manufacturers in all industries as well as financial institutions. The firm’s Paris office comprises lawyers who trained at major international law firms and who are highly regarded for their expertise. The team is recognised for its work in complex, cross-border litigation; commercial, banking, corporate and post-M&A disputes, insurance/reinsurance, product liability and environmental litigation; as well as mass litigation and class actions. Its work on mass and group litigation linked to the field of hazardous substances is well recognised, with some of its pro-company case law featuring in the Civil, Civil Procedure and Social Security Codes due to their significance.

The European Union (EU) has set itself the tasks of reducing greenhouse-gas emissions, promoting a circular economy, and improving consumer information – and we have been hearing a good deal about these objectives of late.

These goals are not unfamiliar to French lawmakers, who have been enacting environmental legislation for some time, and have promoted themselves as pioneers in this field. The most notable laws in this area are the Anti-Waste Law (Law No 2020-105 of 10 February 2020), aimed at transforming the French linear economy into a circular economy, and the Climate and Resilience Law (Law No 2021-1104 of 22 August 2021), which supports the fight against greenwashing in advertising.

The European legislator has also taken up this legislative trend. In 2020, the European Commission adopted the “Green Pact”, a set of measures designed to put the EU on the path to ecological transition with the ultimate goal of achieving carbon neutrality by 2050.

This objective will primarily be achieved through the “Fit for 55” package – a number of proposals aimed at revising and updating EU legislation so that greenhouse-gas emissions in Europe can be cut by 55% by 2030. In 2024, several of these proposals have already been successively adopted, and will be implemented gradually.

Although these new regulations will not overturn the current French legislative environmental framework, which has often been a forerunner in this area, they do deserve a closer look. The focus will be on consumers’ right to repair, ecodesign production and the battle against greenwashing.

Product Repair Over Replacement

In France, if a consumer wishes to have a defective product repaired, they can now take advantage of the legal warranty of conformity. This is a legally binding warranty that entitles consumers to have a defective tangible personal product repaired or replaced, if they choose, within two years of its purchase.

To facilitate the implementation of this warranty, the French legislator has created a presumption of non-conformity whereby defects that appear within 24 months of the delivery of a product are, in the absence of proof to the contrary, presumed to have existed at the time of delivery. For second-hand products, this period was initially set at six months, but the Anti-Waste Law has extended it to 12 months.

The purpose of the Anti-Waste Law has been to reform the legal warranty of conformity to make it more attractive to consumers. This should also be achieved by improving consumer information on their right to repair. Therefore, since 1st January 2022, professionals have been required to provide information on legal warranties and their duration on product invoices to increase visibility. Failure to comply with this requirement is punishable by a fine up to EUR3,000 for a natural person and EUR15,000 for a legal person.

The Anti-Waste Law goes even further in respecting consumers’ right to repair as it provides that, if a product is repaired under the legal warranty of conformity, the consumer benefits from an additional six months’ warranty, giving a total warranty of 30 months.

The aim is clearly to encourage product repair in order to transform the linear economy – producing, consuming and discarding – into a circular one, by manufacturing products in a sustainable way and limiting the consumption and waste of resources. Manufactures and sellers are expected to comply with this regulation.

The message has also resonated at European level, however, as the European Parliament and Council have recently adopted Directive (EU) 2024/1799 of 13 June 2024 on the right to repair (the so called “R2R” Directive), which must be transposed by Member States no later than 31 July 2026.

Under the R2R Directive, manufacturers are required to provide fast and cost-effective repair services and to inform consumers of their repair rights.

It is interesting that, after expiry of the legal warranty, manufacturers will still be required to repair certain products – such as washing machines, dishwashers, refrigerators, vacuums, mobile phones and tablets – listed in an appendix to the R2R Directive. This list is set to grow, as the European Commission will be able to update it line with future regulatory developments.

The listed products will be repaired free of charge or at a reasonable price and, during the repair, manufacturers may lend consumers a replacement product. Manufacturers established outside the EU are not exempt from this obligation, which cascades down to other economic operators established in the EU, such as the manufacturers’ authorised representatives, importers or distributors. Furthermore, manufacturers will have to make spare parts and tools available at a reasonable price that does not deter repair.

Manufactures will not be able to limit these obligations, as contractual clauses and hardware or software techniques hindering the right to repair the listed products are prohibited. More specifically, manufacturers may not prevent independent repairers from using second-hand or 3D printed spare parts, nor may they refuse to repair a product on the grounds that it has previously been repaired by someone else.

Even though its success has been relative, France has legislation fairly similar to that recently adopted in Europe. For example, the Anti-Waste Law introduced a “repair bonus” – ie, an amount deducted directly from the consumer’s invoice to encourage them to repair a defective product and, in so doing, combat programmed obsolescence. However, the success of this bonus is debatable. The environmental association Zero Waste France has counted 165,000 acts of repair in 2022, whereas 1.2 billion products of electronic equipment were sold in 2021.

It remains to be seen whether, when the R2R Directive is transposed into French law and in the rest of the EU, consumer behaviour will change.

Concrete Requirements on Ecodesign Production

Ecodesign is an approach to products that considers their environmental impact throughout their life cycle – from the extraction of raw materials to manufacture, use, recycling, and, finally, disposal.

In France, the Anti-Waste Law introduced principles of ecodesign under Article L. 541-10-12 of the French Environmental Code. According to this provision, producers are required to prepare and implement a prevention and ecodesign plan to reduce the use of non-renewable resources and increase the number of recycled materials.

This prevention and ecodesign plan, which is revised every five years, may be individual or common to several manufacturers. It must include an assessment of the previous plan and define the prevention and ecodesign objectives and actions to be implemented by manufacturers over the next five years. The individual and common plans are referred to the eco-organisation set up by the manufacturers, which publishes a summary that is accessible to the public.

The Ecodesign for Sustainable Products Regulation (ESPR), which entered into force on 18 July 2024 and replaces Directive 2009/125/EC, takes ecodesign one step further by setting out very clear and concrete rules for manufacturers.

For instance, regarding durability and reparability, manufacturers must design products in such a way as to maximise their period of use and, simultaneously, minimise their need for replacement. In this respect, the design must allow reasonably simple disassembly and repair, and components and sub-assemblies must be accessible to allow repair and replacement.

Moreover, the ESPR requires manufacturers to limit or totally exclude the use of materials or substances that could hinder their re-use or recycling, or that are harmful to the environment. Manufacturers will also have to incorporate a minimum threshold of recycled materials in the products to stimulate the circular economy and encourage the use of secondary resources.

The European Commission will issue delegated acts to define certain indicators relating to the environmental performance of the products before they are placed on the market. For example, the European Commission will have to define the minimum percentage of recycled materials in the composition of products or, conversely, the maximum quantity of emissions authorised for the manufacture, use and disposal of products. Manufacturers will therefore have to pay close attention to future acts to comply with these new production requirements.

A core measure of the ESPR regulation that is also worth mentioning is the Digital Product Passport, which will provide information on the environmental sustainability of products. The aim is to make this information easily accessible by scanning a data medium, and to provide consumers with information on sustainability and reparability indicators, the use of recycled materials and the availability of spare parts.

The Digital Product Passport will in fact enable manufacturers to promote their ecodesigned products throughout the EU. Therefore, consumers who are concerned about their carbon footprint will have access to this information and will prioritise such products. However, care must be taken here, as the provision of information about a product’s environmental qualities is also subject to specific regulations.

A Dual Remedy to Combat Greenwashing

In the context of increasing environmental awareness and requirements, some professionals have been using misleading arguments based on good ecological practices in their marketing or communication operations. This is commonly known as “greenwashing”.

Under French law, professionals that provide misleading information to consumers are penalised under Article L. 121-2 of the French Consumer Code.

To ensure that consumers are well informed about carbon neutrality claims, the Climate and Resilience Law of 22 August 2021 has amended Article L. 121-2 to include false claims, indications or presentations likely to mislead the consumer about the environmental impact of the product or the extent of the advertiser’s environmental commitments in the definition of “misleading advertising”.

Misleading environmental claims may be subject to a fine of up to EUR300,000 (EUR1,500,000 for a legal entity). These amounts may be increased to 10% of the annual average turnover calculated over the last three years, or 50% of the amount of the expenses incurred to communicate on the misleading claim, when the profit generated from the misleading practice exceeds the amount of the initial fine. The amount of this fine can be increased to 80% when it is a misleading environmental claim.

The Anti-Waste Law has additionally prohibited the use of certain type of claims, such as “biodegradable”, “compostable” or “environmentally friendly”, or any other equivalent wording on all packaging, products and advertising. Such claims are considered too vague, and can therefore mislead consumers.

The European institutions have also taken action in this field to harmonise the framework for environmental claims.

On the one hand, the European Parliament and Council have adopted Directive 2024/825 amending Directives 2005/29/EC and 2011/83/EU (the so-called “Greenwashing Directive”) to offer consumers the means to act in favour of the green transition through better protection against unfair practices and improved information.

For instance, the Greenwashing Directive provides a definition of “environmental claim” and “generic environmental claim”, which are welcome in France where environmental claims are mainly defined by professional recommendations.

Moreover, the new Directive punishes practices which mislead the consumer regarding the environmental characteristics of the product. In this respect, there are no major changes in France, as the Climate and Resilience Law already targeted these practices when they concerned the environmental impact of a product or the scope of professional commitments.

This Directive must be transposed in Member States by 27 September 2026 at the latest.

There is also a proposal for a directive on the justification and communication of explicit environmental claims presented by the European Commission on 22 March 2023, known as the “Green Claims Directive”.

The Green Claims Directive has not yet come into force, but we already know that it will lay down minimum requirements for the justification and communication of environmental claims. More specifically, environmental claims will have to be based on widely recognised scientific evidence, and demonstrate that environmental effects are significant from the point of view of a product’s life cycle.

The Directive also provides a framework for comparative environmental claims and proposes to regulate environmental labels so that only labels awarded under environmental labelling schemes established under EU law are permitted.

The proposal for a directive is currently awaiting its first reading by the Council, following its adoption by the European Parliament on 12 March 2024.

In conclusion, the French legal environmental backdrop will not drastically change after the implementation of the recent EU legislation. The foundations of a circular and sustainable economy are already there. However, under the influence of the EU, the legal framework will be even more demanding for manufacturers, who will need to think carefully about the environmental impact of their products throughout their entire lifecycle, and the way they are marketed, sold, and used, or they will expose themselves to a serious risk of litigation based on consumer and environmental French laws.

Signature Litigation AARPI

49/51 Avenue George V
75008 Paris
France

+33 (0) 1 70 75 58 00

info@signaturelitigation.com www.signaturelitigation.com
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Trends and Developments

Authors



Signature Litigation AARPI is a specialist firm handling major, high-value litigation, arbitration and regulatory investigations. From offices in London, Paris, Frankfurt and Gibraltar, it handles multi-party disputes stretching across multiple jurisdictions and acts for numerous worldwide manufacturers in all industries as well as financial institutions. The firm’s Paris office comprises lawyers who trained at major international law firms and who are highly regarded for their expertise. The team is recognised for its work in complex, cross-border litigation; commercial, banking, corporate and post-M&A disputes, insurance/reinsurance, product liability and environmental litigation; as well as mass litigation and class actions. Its work on mass and group litigation linked to the field of hazardous substances is well recognised, with some of its pro-company case law featuring in the Civil, Civil Procedure and Social Security Codes due to their significance.

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