On 29 March 2024, the bill of law No. 8370 (the “Bill”) was submitted to the Chamber of Deputies to transpose into national law the Directive (EU) 2022/2464 on corporate sustainability reporting (the ”CSRD”). On an ancillary basis, the Bill also aims to implement the delegated Directive (EU) 2023/2775 on the adjustment of the size criteria for micro, small, medium-sized and large undertakings or groups (the “Delegated Directive”). In this context, the Bill aims in particular to amend the amended Law of 19 December 2002 on the register of commerce and companies and annual accounts of undertakings (the “2002 Law”) and the amended Law of 10 August 1915 on commercial companies (the “1915 Law”). Moreover, the Bill aims to amend various sector-specific laws, foremost among which are the amended Law of 5 April 1993 on the financial sector, the amended Law of 11 January 2008 on transparency obligations of issuers and the amended Law of 23 July 2025 on the audit profession. 

While the implementation of the Delegated Directive will have the effect of adjusting by 25 % and rounding up the numerical thresholds for the various categories of companies and groups, the implementation of the CSRD will result in the introduction of a whole series of new sustainability obligations with which the in-scope companies will have to comply. By raising the above-mentioned thresholds, the European legislator has sought to exempt certain companies from the obligation to draw up and publish sustainability information. In line with the CSRD, the Bill defines sustainability matters as environmental rights, social rights, human rights and governance factors, including sustainability factors defined in point (24) of Article 2 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector. 

I.    Scope of application

Under the former regime of Directive (UE) 2014/95 on the disclosure of non-financial information (the “NFRD”), the only companies which had to establish and publish non-financial information were the large public interest entities with more than 500 employees. Under the new regime of the CSRD, the sustainability-reporting obligation applies among others to:

  • all the large listed and non-listed companies; 
  • all the listed small and medium enterprises (the “SMEs”), except micro undertakings;
  • all the parent companies of a large group;
  • the third-country companies listed in the European Union (the “EU”);
  • the third-country companies which have a significant activity on the territory of the EU and which exceed certain thresholds. 

Furthermore, to fall within the scope of (consolidated) sustainability reporting, the concerned companies must be organised under one of the following legal forms: public limited liability company (société anonyme), corporate partnership limited by shares (société en commandite par actions), private limited liability company (société à responsabilité limitée) or, in some cases, general corporate partnership (société en nom collectif) and common limited partnership (société en commandite simple).

In so doing, the CSRD has considerably broadened the scope of companies covered by sustainability reporting obligations. 

II.    Main amendments of the 2002 Law and the 1915 Law

The Bill states that the in-scope companies (including the parent companies of a large group) shall include sustainability information in their (consolidated) management report, using an approach known as “double materiality” (or “double importance”), i.e. information necessary to understand the company’s or the group’s impacts on sustainability matters (“impact materiality”), and information necessary to understand how sustainability matters affect the company’s or the group’s development, performance and position (“financial materiality”). It should be noted that this information will have to be included in a dedicated section of the (consolidated) management report (and can no longer appear in a separate report, as under the NFRD). 

For details of the sustainability information to be communicated, please refer to Articles 6 and 24 of the Bill (new Article 68bis, (2) of the 2002 Law and new Article 1730-1, (2) of the 1915 Law). This will include a brief description of the company’s or the group’s business model and strategy, including information such as (i) the resilience of the company’s or the group’s business model and strategy in relation to risks related to sustainability matters, (ii) the opportunities for the company or the group related to sustainability matters, (iii) the resources deployed by the company or the group, particularly in relation with the limiting of global warming, and a description of the time-bound targets related to sustainability matters set by the company or the group.  

As required by the CSRD, sustainability information shall be published in accordance with the European Sustainability Reporting Standards (the “ESRS”), which are to be drawn up by the European Financial Reporting Advisory Group (the “EFRAG”) and adopted by the European Commission.

Particularity: the in-scope companies shall take into account their entire value chain when compiling (consolidated) sustainability information. Value chain means especially the products and services, the business relationships and the supply chain of the company or the group. It is worth emphasizing that, for the first three years of application, the Bill gives the in-scope companies the option of omitting this information about their value chain in the event that not all of it is available. In such cases, however, the in-scope companies shall explain the efforts made to obtain the said information, the reasons why not all of it could be obtained, and their plans to obtain it in the future.

Faithfully transposing the CSRD, the Bill provides that an approved statutory auditor (réviseur d’entreprise agréé) must verify the (consolidated) sustainability information, just like financial information, as part of a so-called limited assurance mission. In particular, the approved statutory auditor shall express an opinion on the compliance of the (consolidated) sustainability information with legal requirements (including compliance with the ESRS, with the process carried out by the company to identify the information reported, with the requirement to mark up (consolidated) sustainability reporting, as well as with the reporting requirements set out in Article 6 of Regulation (EU) 2020/852). 

Implementing an option provided by the CSRD, the Bill offers a choice to the in-scope companies: the approved statutory auditor may be the one in charge of the statutory audit of the accounts (annual or consolidated), or another approved statutory auditor. 

Last but not least, the managers of the in-scope companies will risk being subject to criminal sanctions in the event of a breach of their sustainability obligations (see Article 16 of the Bill which aims at amending Article 1500-2 of the 1915 Law). As for listed companies, the CSSF (Commission de Surveillance du Secteur Financier) will be responsible for monitoring the corporate sustainability reporting. It is understood, moreover, that refractory companies will incur reputational risk, market risk and the risk of interrupted access to sources of financing.  

III.    Progressive implementation strategy

As for the new sustainability reporting obligations, the Bill adopts a progressive implementation strategy for the categories of companies, starting with large listed companies with over 500 employees and ending with third-country companies with a subsidiary or a branch in the EU. 

IV.    Next steps

As the Bill is currently in committee, following its review by the Conseil d’Etat, the Chambre des métiers and the Chamber of Commerce, it should be presented and discussed soon in public session. As the transposition deadline expires the 6 July 2024, we can expect the Bill to be adopted within the next three months. 

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