{"id":11096,"date":"2025-06-12T09:11:12","date_gmt":"2025-06-12T07:11:12","guid":{"rendered":"https:\/\/insights.ieseg.fr\/?p=11096"},"modified":"2025-06-12T09:14:49","modified_gmt":"2025-06-12T07:14:49","slug":"lessons-from-france-duty-of-vigilance","status":"publish","type":"post","link":"https:\/\/insights.ieseg.fr\/en\/resource-center\/lessons-from-france-duty-of-vigilance\/","title":{"rendered":"Lessons from France: preparing for the EU Directive (CSDDD) through the Duty of Vigilance Act"},"content":{"rendered":"\n

With the proposed <\/strong>\u201cOmnibus\u201d package<\/strong><\/a>, the European Union may be taking a step backward on the question of corporate due diligence and sustainability rules. What lessons can we draw from the experiences of French companies since the introduction of the pioneering French Corporate Duty of Vigilance Act in 2017? Following the Rana Plaza tragedy in 2013, this law requires companies to consider social and environmental risks across all their subsidiaries, contractors and subcontractors. What adjustments will be done to harmonize French national legislation with simplified future European regulations?<\/strong><\/p>\n\n\n\n

\n\n\n\n

On February 26, the European Commission presented a package of simplification measures called \u201cOmnibus\u201d<\/a> proposing to amend the existing Corporate Sustainability Due Diligence Directive (CSDDD) as well as the Corporate Sustainability Reporting Directive<\/a> (CSRD). These measures propose to simplify, postpone or even limit the scope application of due diligence and reporting<\/a> obligations for companies. The \u201cOmnibus\u201d package aims to enhance the competitiveness of EU firms in a complex international scenario. The Omnibus procedure has been criticized for its rushed  timeframe, lack of debate, exclusion of civil society<\/a> actors, and for marking a step backward in the development of social and environmental standards.<\/p>\n\n\n\n

In France, laws on corporate due diligence were passed in response to the Rana Plaza<\/a> disaster. In 2013, this building in Bangladesh, housing textile workshops subcontracted by major brands, collapsed, killing over 1,000 workers. In 2017, France responded with a pioneering law<\/a> on the \u201cCorporate Duty of Vigilance\u201d. This concept was later expanded at the European level by the directive of June 13, 2024<\/a> which requires all EU member states to implement similar measures. The law applies to companies with at least 5,000 employees in France and to those with more than 10,000 employees globally if they have their headquarters elsewhere in the world, and requires a reassessment of their approach to social, environmental, and governance risks.<\/p>\n\n\n\n

This measure extends to the activities of their subsidiaries and business partners. It is a way of making companies responsible for tracking all their subcontractors. To get a better understanding of French companies\u2019 experiences in implementing these requirements, we interviewed managers in different roles and different sectors: compliance officers, corporate social responsibility (CSR) managers, and quality control managers.<\/p>\n\n\n\n

Resources & organizational capabilities<\/h2>\n\n\n\n

The companies surveyed highlighted that complying with the law requires significant resources and strong organizational capabilities with an emphasis on training their teams and developing effective control systems. This is why compliance departments play a key role, working with various departments such as sustainable development, purchasing, and quality teams.<\/p>\n\n\n\n

They also stressed that legal uncertainty is compounded by the complexity of global supply chains, which makes it very difficult to map risks. Traceability and transparency are difficult to ensure, particularly beyond the first or second level of subcontracting, where identifying partners is much less straightforward. A CSR manager at a sports equipment manufacturing and retail company questions the complexity of determining the impact of its partners, suppliers, and subcontractors:<\/p>\n\n\n\n

\u201cWhile we can identify the impacts of our own activities, it is not so easy to do so for our partners’ sectoral impacts. How much do we know about the impacts of the transport sector, e-commerce, and IT services?\u201d<\/em><\/p>\n\n\n\n

Adapting contracts<\/h2>\n\n\n\n

If certain suppliers are reluctant to share information about their partners, it can significantly hinder the effective implementation of the duty of vigilance across the entire value chain. In such cases, companies may be compelled to renegotiate contracts and include specific clauses on ethics and compliance, a process that can be time-consuming and potentially contentious. Additionally, conducting environmental audits presents its own set of challenges due to regulatory discrepancies between countries \u2014 for example, in areas such as water treatment and waste management:<\/p>\n\n\n\n

\u201cWe can ask our suppliers for recycled\/recyclable materials, but how do they manage their waste if they are not subject to specific water treatment requirements locally?\u201d asks a compliance manager in the retail sector.<\/em><\/p>\n\n\n\n

This challenge is even more pronounced for companies and holdings operating across diverse economic sectors \u2014 such as Elo, Adeo, Engie, LVMH, and others. The legal requirement to produce a single, consolidated risk map that encompasses all identified risks throughout their varied activities is often perceived as ambiguous, and in some cases, misaligned with the operational realities of such complex organizations. Unifying risk mapping across fundamentally different industries can obscure sector-specific issues, dilute the relevance of certain risks, and complicate the prioritization and mitigation processes. The managers we interviewed emphasized the iterative and evolving nature of this process, as well as the importance of constantly adjusting practices based on ongoing risk reassessment.<\/p>\n\n\n\n

Orange and Air Liquide at the forefront<\/h2>\n\n\n\n

Our feedback from the professionals interviewed has nevertheless confirmed the positive impact of due diligence rules in France. Compliance activities aligned with broader organizational objectives, particularly CSR initiatives, often create significant overlap between non-financial reporting and due diligence obligations, resulting in a leverage effect. Companies rely on environmental and social risk monitoring tools and non-financial data to establish their vigilance plans and harmonize their sustainability reporting.<\/p>\n\n\n\n

Some companies, such as Air Liquide and Orange, even stand out for their exemplary vigilance plans, that have been recognized with a Corporate Vigilance Plan Award amongst the companies listed on the French CAC 40<\/a>. Air Liquide was recognized for its comprehensive approach and transparent risk mapping, regular assessment of its subcontractors, targeted prevention measures, and alert mechanism developed in collaboration with trade unions. Orange, for its part, has integrated vigilance into its employee training. This recognition illustrates the importance of robust vigilance strategies based on transparency, governance, and extensive dialogue with stakeholders.<\/p>\n\n\n\n

NGOs as essential partners<\/h2>\n\n\n\n

The professionals we surveyed highlighted the role of NGOs in implementing the duty of vigilance as both essential and a source of tension. In France, many managers acknowledge that while non-governmental organizations play a key role in defending human rights and the environment, their approach can sometimes be perceived as overly dogmatic. Some NGOs position themselves as  uncompromising guardians of ethical standards, which hinders the possibility of genuine collaboration with companies.<\/p>\n\n\n\n

Speaking about dialogue with NGOs, a CSR manager in the construction industry noted: “Very few NGOs work with us, which is a real shame. NGOs criticize us for making a profit, but they often forget that it is precisely because of this profit that we can invest in sustainable solutions or technical tools to measure our environmental impact. There is something virtuous about profit\u2014 it’s not the devil.”<\/em><\/p>\n\n\n\n

Expectations are therefore sometimes misaligned: NGOs may misunderstand the operational, legal, and economic constraints companies face, making exchanges difficult and occasionally unproductive. Nonetheless, more open and constructive cooperation between companies and NGOs remains essential.<\/p>\n\n\n\n

\n\n\n\n

Carla Bader & Maximiliano Marzetti, IESEG School of Management<\/a><\/p>\n\n\n\n

This is an English version of an article originally published in French on The Conversation France<\/a>.<\/p>\n\n\n\n\"The\n\n\n\n

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Photo iStock \u2013 phakphum patjangkata<\/p>\n","protected":false},"excerpt":{"rendered":"

With the proposed \u201cOmnibus\u201d package, the European Union may be taking a step backward on the question of corporate due diligence and sustainability rules. What lessons can we draw from the experiences of French companies since the introduction of the pioneering French Corporate Duty of Vigilance Act in 2017? Following the Rana Plaza tragedy in … Lessons from France: preparing for the EU Directive (CSDDD) through the Duty of Vigilance Act<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":10592,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[483,487],"tags":[416,1018,307,413,1013],"article-type":[12],"acf":[],"yoast_head":"\nLessons from France: preparing for the EU Directive (CSDDD) through the Duty of Vigilance Act<\/title>\n<meta name=\"description\" content=\"What lessons can we draw from the experiences of French companies since the introduction of the Corporate Duty of Vigilance Act in 2017?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insights.ieseg.fr\/en\/resource-center\/lessons-from-france-duty-of-vigilance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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