More of a CSR hue in the Civil and Commercial Codes. Article 61 of the draft text address these issues and draws on a government commissioned report published in March 2018 (c.f. article No. 10598) that was co-authored by Nicole Notat, founder and president of Vigeo Eiris, and Jean-Dominique Senard, CEO of Michelin, and which examined links between business and the general public interest. The March report recommended several legal modifications that would ‘strengthen the inclusion of social and environmental issues in companies’ strategic business plans.’ In line with the experts’ recommendations, this Pacte draft law is first seeking to alter article 1833 of the Civil Code, a pillar within the company legislation corpus that intends ‘all companies have a lawful, legitimate objective and are constituted in the common interest of their partners,’ by way of the addition of a second paragraph thus: ‘the company is managed in its social interest by taking the social and environment aspects of its business activities into account.’
France: will draft legislation that aims to broaden businesses goals beyond pure profit really change anything?
In February 2017, attention turned to France as it adopted landmark due diligence legislation requiring certain French corporates to anticipate and prevent environmental and human rights violations both at it foreign subsidiaries as well as along its supply chains (cf. article No. 10132). This new draft legislation called the ‘Plan, d’action pour la croissance et la transformation des entreprises (Pacte)’ (Corporate growth and transformation action plan) intends to encourage companies to better consider the social and environmental aspects of their businesses. Although it won’t make it to the statute books before Spring 2019 (it’s first reading has just been adopted by the National Assembly, and is scheduled to move to the Senate in January 2019) the legislation will result in changes to both the Civil Code and the Commercial Code in order to introduce the idea that companies can have more than one social objective (profit). Repercussion and impacts remain the subject of discussion and debate.
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