Sustainability and Duty of Care: Some Summer Updates

Legal News Overview – Ethics and CSR

Prepared in collaboration with our interns:

Marie Gava – Student at Université Paris Ouest Nanterre La Défense
Esther Leguil – Student at Université Paris Panthéon-Assas

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Adoption of the EU Directive on Corporate Sustainability Due Diligence (CSDDD) on May 24, 2024 (Council of the EU)

This directive was published on June 13, 2024, in the Official Journal of the European Union (OJEU).

Key Points to Note:

• Progressive Implementation: The directive will be implemented progressively, with full compliance expected by July 2029 for the smallest companies subject to the directive.
• Due Diligence Requirements: Companies will need to integrate due diligence into their policies and risk management systems. They are required to prevent, mitigate, and, if necessary, repair any negative impacts. They must also report on their due diligence efforts.
• Sanctions: Non-compliance can result in a fine capped at 5% of the company's global net revenue from the preceding fiscal year.
• Member States' Deadline: Countries have until July 26, 2026, to transpose this directive into national law.

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Three Initial Decisions by the Paris Court of Appeal on Due Diligence

On June 18, 2024, the Paris Court of Appeal issued its first decisions regarding the obligations of companies under the March 27, 2017, law on the duty of vigilance of parent companies and ordering companies (RG 23/14348, 21/22319, and 23/10583).

• Total Energies and EDF: The Court of Appeal accepted claims against these companies from several associations, but imposed strict limitations on actions brought by local authorities.
• Vigie Groupe (formerly Suez): The Court confirmed the inadmissibility of claims against Vigie Groupe due to a lack of standing.