The French PACTE Law or Two-Speed Corporate Social Responsibility (CSR)

  • Catherine MaleckiEmail author
Living reference work entry


The French PACTE (Action Plan for Corporate Growth and Transformation) Law of 22 May 2019 (Loi PACTE Plan d’action pour la croissance et la transformation des entreprises. Law no. 2019-486 of 22 May 2019 on Corporate Growth and Transformation, JORF no. 0119 of 23 May 2019) is the kind of far-reaching law commonly adopted in France(Loi TEPA (Law on Labour, Employment and Purchasing Power) of 17 August 2009) with major ambitions to revive corporate growth. Among its many provisions, the amendment of an emblematic article of the French Civil Code is a strong sign in favor of the generalization of CSR, but it seems to establish at two speeds: a cruising speed for the companies already concerned and a crawling speed or “snail’s pace” for the companies that are newly concerned. For the first time, one article, the article 1883 al. 2 Civil Code stipulates that “The company shall be managed according to its corporate interest, taking into consideration the social and environmental issues related to its activity.” Many questions arise as how to implement this article, which kind of sanctions, what about Conventional sanctions: the unknown elements, or the possible role of the judge.


CSR Nonfinancial reporting PACTE LAW French Law 


We are in Chap. III, sect.2 of the PACTE bill: “Rethinking the place of enterprises in society’”: this place is not insignificant, asit is consistent with the European Commission’s definition, recognized by France, that CSR concerns “the responsibility of enterprises for the effects they have on society”(Malecki 2018). This is of considerable symbolic importance: it is a question of affirming the social and environmental role of the enterprise and of associating the employees more closely with the results and with the body of shareholders in their enterprise, which appears in Chap. III of the “Fairer companies” bill. Quite an undertaking! The idea is to introduce CSR smoothly, flexibly (flexible law), in a nonbinding (?) manner, into a text to show that France is ahead of the game, and that it is extending the generous ideas of CSR (social and environmental benefits for all) to all companies. Nevertheless, this is a novel approach and even stronger than the amendment of Article 1832 of the Civil Code, permitting the creation of one-person companies. Indeed, CSR is protean and takes on many different forms. Casting it in stone, albeit implicitly, in such a fine article as Article 1833 of the Civil Code gives food for thought and raises questions.

The amendment of Article 1833 of the Civil Code is indeed important, with its second paragraph expected to stipulate that “The company shall be managed according to its corporate interest, taking into consideration the social and environmental issues related to its activity.” The time for posing questions about wording is therefore over (Should Articles 1832 and 1833 of the Civil Code be rewritten?, Couret A., Dalloz 2017.222). It is now time to consider the practical questions to come. This brief article invites us to put these different terms and these different perspectives “under the microscope.”

Observation: It is difficult to DISSOCIATE the environmental aspects from the social dimensions because these notions are very closely linked (e.g., in labor law, health and environment, environmental alerts, European sources, etc.). Combining these two types of issues could create needless complexity. But no one can naturally turn a deaf ear to the environmental concerns that are innervating society in the sociological sense (climate change, Youth Climate March, etc.). For some years now, companies (referred to here as “enterprises”) have had to embrace a long-term, social, global, and inclusive approach, and cannot therefore simply ignore the environmental dimension. The EU sends out strong and consistent signals (cf. the latest Notat-Sénart report, in line with Mr Bruno Le Maire’s ambitions (“There is no profit if companies do not take social and environmental issues into account”).

Let’s go back to the terms:
  • “is” (and no longer “must” as the Notat-Sénart Report advocated) “managed” according to its “corporate interest”

  • the “social and environmental ‘issues’” relating to its “activity”

  • “by taking” rather than “must take” into consideration”

This is a dynamic and flexible approach.

The Scope of Article: 1883 C. CIV.: A General Scope

Before considering the many questions that are sure to arise, let us give a brief (and painless) reminder – tinged with patriotism – that France has been a European leader in CSR for 18 years (cf. Molinié and Drago’s Report), we could mention the following laws: NRE (New Economic Regulations), Grenelle 1 (3 August 2009 – 10 years ago already – and Grenelle 2 of 12 July 2010, Order of 19 July 2017, etc.). Adopting an almost militant approach, the intention of the Notat-Sénart Report (8 March 2018) – to broaden the scope of CSR via this new article 1883 of the Civil Code – is a political intention to show that France is going further in these issues.

Which Companies Are Concerned? All of Them, or Almost All

Let’s start with this question because this article has a general focus; certain companies are ahead of the game in this area and are already concerned.Within companies, the directors will be responsible for ensuring the concrete management of their enterprise because it is a question of “managing” the thinking “about the company’s strategic orientations.”

So, there will be a two-speed CSR:
  • A cruising speed for public limited companies (sociétés anonymes– SA) and limited partnerships with share capital (sociétés en commandite par actions –SCA)because the landscape is already familiar: we have the financial performance declaration derived from the Order of 19 July 2017. Question: Regarding this declaration, what is the scope of the statement “taking these issues into consideration…”? This text is added to the nonfinancial reporting mechanism. Does this confuse the issue? No, it rather implies a greater openness towards stakeholders with opportunities for them to act.

  • In a listed or unlisted public limited company, the members of the Board of Directors (BoD) can no longer ignore these issues (cf. the revision of the AFEP/MEDEF Code of November 2018, which finally specified, in the principle or recommandation 1.4. that: “if (the BoD) shall be informed of market developments, the competitive environment and the main challenges facing the company, including in the field of social and environmental responsibility.”)

  • Possible creation of stakeholder committees for public limited companies, but what effects? Is this really necessary and how can they be constituted when “diversity” may be present (compliance) within Boards of Directors?

The scope of Article 1833 para. 2 of the Civil Code is not insignificant because the text breaks new ground, followed by a “tidying up” of numerous articles of other Codes that are concerned.

Article L. 225-35 para. 1 of the Commercial Code will therefore be “tidied up” as follows: “…. in accordance with its corporate interest, taking into consideration the social and environmental issues related to its activity.” The same applies to Article L. 225-64 of the Commercial Code. “it (the BoD) shall determine the orientations of the company’s activity and ensure their implementation, in accordance with its corporate interest, while taking the social and environmental issues related to its activity into consideration…”

MutualCompanies Are Also Tidied Up

  • cf. Article L. 111-1-I para. 1 of the French Mutual Code: “Their management shall take into consideration the social and environmental issues related to their activity.” The same applies to the BoD, cf. Article L. 114-17 para. 1.

  • cf.Article L. 931-2 para. 1 of the French Social Security Code concerning provident institutions and unions of provident institutions: “their management shall take into consideration the social and environmental issues related to their activity.”
    • What about other companies? Is it a case of CSR at a “snail’s pace”?

    • Simplified joint stock companies (sociétés par actions simplifiées– SAS): The directors will also be concerned if there is an exact copy of the structure of a public limited company (satisfaction, also see the Notat-Sénart proposal on the governance of these companies which brings them closer to public limited companies, cf. current debate: simplified joint stock companies can be considered as they stand as being technically outside the scope of the Duty of Reasonable Due Diligence Plan (social and environmental aspects, or indeed nonfinancial reporting) (possible Q. from the floor).

However, Article 1833 para. 2 means that simplified joint stock companies can no longer remain outside the scope of the social and environmental issues related to their activities, especially since they may also occasionally employ more than 10,000 employees (i.e., above the thresholds of the Order of 19 July 2017, Decree of 9 August 2017), but they are still not always covered by the financial performance declaration.

Therefore, there will be a substantial difference in implementation in relation to other companies such as limited companies (sociétés à responsabilité limitée– SARL), nonstock corporations (sociétés civiles), and one-person companies (sociétés unipersonnelles, which are numerous in France).

However, the directors will not be completely alone: employees (BoD, shareholders, whistleblowers, trade unions – co-authors of the due diligence plan, the new Economic Social Committee) will also be able to act.

The Implementation of Article 1833 Para. 2 of the Civil Code or the Spirit of This Article: Behaving, Acting, and “Managing” in CSR Terms

“The social and environmental” (precise terms, see the existing situation for public limited companies according to criteria of Art L. 225-102- 1 of the Commercial Code.) “issues” (a vaguer expression) “related to its ‘activity’”

The text does not define the social and environmental “issues,” which is logical, because the term “issues” is flexible and ever-changing, and we have texts derived from CSR (remember that we are not starting from scratch).

Article L.225-102-1 of the Commercial Code thus mentions the “social and environmental consequences” of the enterprise’s activity, particularly respect for human rights, combating corruption, the consequences for climate change, sustainable development, the circular economy, combating food waste, collective agreements concluded within the company, employees’ working conditions and actions to combat discrimination and promote diversity.

Regarding environmental issues, inspiration can be drawn from Art. L. 225-102-1 III para. 2 of the Commercial Code.

“The consequences of the company’s activities, and of the use that made of the goods and services that it produces, with regard to climate change” (cf. Decree of 9 August 2017, which sets out this information).

Climate change, GHG reduction, circular economy, waste management, water, etc. are covered in the nonfinancial management report, in addition to renewable energy sources, tackling food waste (LTECV Law of 17 August, 2015) in public limited companies, and even in the report on the BoD’s activities (which, it should be remembered, was supposed to disappear…); which naturally fall within the company’s (enterprise’s) “strategic orientations.” What guidelines will there be for this scheme? Nonfinancial reporting and especially the Decree of 9 August 2017.

However, the wording is “taking into consideration” (a broad expression), which paradoxically takes us back to the early days of CSR that were so strongly criticized (cf. European recommendation of 18 July 2001, at a time when CSR was only a voluntary incentive). However, this is 18 years later when CSR has become a “major” issue. Therefore, allowing directors some flexibility is welcome, but once again, it will depend on the corporate form concerned.

It will therefore be necessary to consider the “spirit” of the PACTE law, which considers CSR to be a corporate policy in its own right – a global performance tool that is not necessarily out of step with the economic and financial interests of the enterprise. The companies concerned will be able to create a CSR policy by taking account of extra-financial parameters in the company’s economic results: directly, with the improved productivity of employees working in an environment that shows greater respect for society, or indirectly, with the consideration of (or even collaboration with) all stakeholders improving the identification and prevention of the risks to which the enterprise is exposed (ethical alerts, feedback on subsidiaries’ practices, etc.).
  • The organization of the company to take account of environmental issues and, where appropriate, the environmental assessment or certification procedures

  • The resources devoted to preventing risks and environmental pollution

  • The amount of provisions and guarantees for environmental risks, provided that this information is not available

The general approach to the practical implementation of this text is to devise it and “orchestrate” it in terms of CSR, i.e., to potentially open it up to stakeholders (the enterprise must play a role in society). This means considering all potential stakeholders (NGOs, employees, environmental associations, subcontractors, consumers, etc.). This article provides flexibility and opportunities to be seized, but also poses risks.

How can we take these issues into consideration? Of course, this will not consist in producing nonfinancial reports or declarations of financial performance, but inspiration can be taken from these processes. This “taking into consideration” will indeed imply an active version either throughout the management process and most often in advance: these issues can therefore be listed according to the company’s activity (environmental risk management if the company has an industrial activity, or social issues if it has a tertiary activity). Flexibility is essential, as is the choice of approach: it will be a question of determining the social and environmental dimensions of an enterprise’s activity (environmental impact if it carries out an industrial production activity, sustainable water and waste management, etc.). The LTEC Law (Energy Transition and Green Growth) of 17 August 2015 included “the consequences of their activity and of the use of the goods and services they produce with regard to climate change”in the nonfinancial reporting of public limited companies.

Example: The sixth paragraph of Article L. 225-37 of the French Commercial Code is rounded off with a sentence worded as follows:

It shall also report on the financial risks associated with the effects of climate change and the measures the company is taking to reduce them by implementing a low-carbon strategy in all aspects of its business.

This flexible definition is intended to encourage companies that are not subject to the nonfinancial reporting requirement to reflect on the social and environmental issues related to their activity. To some extent, a “positivecompliance could justify the failure to take a particular “issue” into consideration but also, on the contrary, why another issue (e.g., waste management) is taken into consideration in a concrete program, at each stage in the development of this field. This would make it an example of positive soft law. These issues could be considered on the fringes of nonfinancial reporting, which already provides for ethical compliance (see text here).

However, in concrete terms, it will be necessary to think in terms of the company’s stakeholders: employees (health, environment, etc.), consumers (use of goods and services, circular economy), directors (remuneration based on CSR criteria; in this case, traditional sustainable and corporate governance), subcontractors, NGOs, etc.

With regard to risk management, an example can be seen in the Law of 27 March 2017 on the “duty of reasonable due diligence.”This law introduced Articles L. 225-102-4 and L. 225-102-5 into the Commercial Code, with the aim of making international enterprises more accountable for the activities of their subsidiaries and subcontractors located abroad, particularly in developing countries (existence of almost “inextricable” PIL problems).

Its main provision relates to the obligation for certain companies to establish and effectively implement a due diligence plan, including “reasonable due diligence measures to identify risks and prevent serious violations of human rights and fundamental freedoms, and grave harm to human health, safety and the environment, resulting from the company’s activities and those of the companies it controls, directly or indirectly, as well as from the activities of subcontractors or suppliers with which it has an established business relationship, where these activities are related to that relationship.”

The plan includes:
  • Risk mapping for identifying, analyzing, and prioritizing risks

  • Procedures for the regular assessment of the situations of subsidiaries, subcontractors, or suppliers with which an established commercial relationship is maintained, with regard to the risk mapping

  • Appropriate actions to mitigate risks or prevent serious harm

  • A mechanism for issuing alerts and collecting notifications relating to the existence or occurrence of risks, established in consultation with the representative trade union organizations in that company

  • A system for monitoring the measures implemented and evaluating their effectiveness

This will include, for example:
  • Identification of social and environmental risks because “issues” is a forward-looking term (currently addressed by the Law on the Duty of Reasonable Due Diligence (Devoir de vigilance raisonnable)).

  • Transparency: The nonfinancial performance declaration (See Order no. 2017-1180 of 19 July 2017 on the publication of nonfinancial information by certain large enterprises and groups of enterprises, amending Article L. 225-102-1 of the Commercial Code pursuant to the new European standards. The Implementing Decree no. 2017-1265 of 9 August 2017 specified the content of this amended article. CSRreporting obligations are now covered by an “extra-financial performance declaration”) which is always included in the management report that is presented annually to shareholdersmust be published on the company’s website for a period of 5 years. A strong sign of openness to a broad audience.

A listed public limited company with more than 5,000 employees in France or 10,000 in France and abroad will, in any event, be required to provide a Reasonable Due Diligence Report. Admittedly, there is little consistency in the thresholds (sometimes, this is the number of employees and turnover or the balance sheet excluding tax, at other times, only the employee criterion applies).

For the Nonfinancial Report:Version with a Financial Performance Declaration

The application thresholds have changed: small and medium-sized listed companies are no longer subject to this reporting requirement. In addition, the new system exempts subsidiaries from producing such a performance statement, provided that the information concerning them is presented by the group’s parent company on a consolidated basis.
  • Listed public limited companies with 500 employees and €40 million in revenue or €20 on their balance sheet; therefore, major public limited companies (listed companies with more than 5,000 employees in France or 10,000 in France and abroad will, in any event, be required to provide a Reasonable Due Diligence Report).

  • Unlisted public limited companies with 500 employees and €100 million in revenue or on their balance sheet.

(N.B. We have added a complication in the transposition of the CSR Directive which only retained the thresholds of the average number of employees).

For the Reasonable Due Diligence Plan

Public limited companies and limited partnerships with share capital that employ at least 5,000 employees in the company itself and in their direct or indirect subsidiaries, or at least 10,000 employees in the company itself and in their direct or indirect subsidiaries, at the close of two consecutive fiscal years, whose registered office is located in France or abroad.

Large listed and unlisted public limited companies are therefore concerned.

What about simplified joint stock companies?Is there a text covering corporate interest? Remember, however, that they will be naturally concerned.

The Need for a General Practice of Article 1833. C. civ.

What Indicators?

Nothing new under the sun of CSR, cf. the NRE (New Economic Regulations) Law of 15 May 2001 (“taking into consideration the social and environmental consequences of its activity”). The company’s activity will therefore be the new “indicator” of any hierarchy that might exist between the different and potentially conflicting issues (the social and the environmental sectors do not always go hand-in-hand, except in a peaceable and virtuous world). Activity will therefore be the key indicator – a new business model. This is a sensitive issue, of course, as conflicts between social and environmental issues must be avoided.

Does this add needless complexity? Not exactly, because we already have a system that developed from our lead in CSR thanks to the stakeholders, because behind this sweeping term (Cf. National Assembly debates, Notat Sénart Report, which should not be taken as “gospel”), there are many stakeholders: employees, shareholders, etc., who possess the means to act (e.g., via the Reasonable Due Diligence Plan, Law of 27 March 2017). Any regrets? The Notat-Sénart report (cf. recommendation 4) proposed a “stakeholders’ committee” that would be independent of the Board of Directors. It is the corporate interest that is the “repository” for these issues.
  • Let us first mention the “must-haves” for CSR: international conventions (the UN’s Global Impact initiative, OECD guidelines, ISO 26000, etc.) and European Union law.

  • The “carbon” balance of greenhouse gas emissions for certain companies (Decree no. 2001-829 of 11 July 2011). This decreeadded a new section to the Environment Code (Book II, Title II, Chap. IX, Sect.4), entitled: “Greenhouse Gas Emissions Balance and Territorial Climate and Energy Plan,” which introduces a Greenhouse Gas Emissions Balance (BEGES).

  • This applies to: enterprises with more than 500 employees in mainland France (250 employees in French overseas departments and territories), public institutions with more than 250 employees, local authorities with more than 50,000 inhabitants, and the French State.

  • This balance must be published every 4 years for the entities mentioned in (a) and every 3 years for those mentioned in (b), (c), and (d). It is accompanied by a summary of the actions planned over the next 3 years, with the expected reductions. Failure to publish this balance by those “bound” by this obligation can lead to a fine of up to €1,500 (very poor deterrent…).

  • The growing role of official labels (reminder of existing labels, Eco Label, European project, TEEC (Energy and Ecological Transition for the Climate)) and the proposal to promote sectoral and territorial CSR benchmarks for SMEs (very useful for the latter because most fall “outside the scope” of nonfinancial reporting), and in line with Article 53 of Programme Law no. 2009-967 of 3 August 2009 for implementation of the “Grenelle” environmental legislation), Article 61 quater (new) of the PACTE bill provides for the establishment of a “structure”to review and evaluate corporate social responsibility labels that enhance the value of products, behaviours or strategies. This structure brings together experts and Members of Parliament, among others, and proposes ways of rationalising and harmonising the conditions for the validity, reliability and accessibility of these labels for small companies.”

  • What type of “structure” could oversee and steer this implementation? A future Independent Administrative Authority (Autorité administrative indépendante – AAI)? A CSR agency dedicated to SMEs? As things stand, we have the CSR Platform. This could be a mechanism for accrediting independent third party bodies responsible for awarding these labels.

  • The three focuses are specific: products, behaviors, and strategy.

  • This could involve sectoral and territorial CSR benchmarks for SMEs.

  • To come: The EU is drawing up a proposal for a regulation on the implementation of nonfinancial reporting (materiality principle) resulting from the transposition of the CSR Directive of 22 October 2014.

What Sanctions?

“Tools” Specific to CSR: Known Elements

Critics of a binding form of CSR that would be a source of potential sanctions consider that there are no specific sanctions. The fact is that, to date, there have been no sanctions based on erroneous or incomplete reporting, in other words, no known litigation. However, the scope of the new Article 1833-12 of the Civil Code should not be underestimated, because its generality leaves the opportunity for strict interpretations by judges on the basis of breaches of the duty of due vigilance, failures to take account of an “activity” that clearly violates circular economy-related issues, or failures to take the increasingly serious problem of climate change into consideration, for example. It should be added that the Law on the Duty of Reasonable Due Diligence is backed by a powerful arsenal. For example, the AMF could be given a role (naming and shaming) for the nonfinancial reports published by listed public limited companies.

The means of action open to (external) stakeholders should not be underestimated.
  • Upstream: Different alerts (environmental, def. of whistleblower unified by Article 6 of the Sapin II Law of 9 December 2016).

  • Downstream: Liability claims against the Board of Directors (BoD) (a collegial body, and possibly directors who are “passive” with regard to these issues, and who are accused of failing to request information). See Order no. 2017-1180 of 19 July 2017 on the publication of nonfinancial information by certain large enterprises and groups of enterprises, amending Article L. 225-102-1 of the Commercial Code pursuant to the new European standards. The Implementing Decree no. 2017-1265 of 9 August 2017 specified the content of this amended article. CSRreporting obligations are now covered by an “extra-financial performance declaration,” which is always included in the management report that is presented annually to shareholders.

The definition of “interest in bringing proceedings,” and the notion of “interested third party” (already widely embraced by case law) would still need to be defined.

Conventional Sanctions: The Unknown Elements or the Possible Role of the Judge

What if it were not a question of violating the corporate interest per se but of violating the corporate interest on grounds that “it fails to take these issues into consideration”? The spirit of the text is as follows: since the social and environmental issues related to the company’s activity are subject to a “very general obligation of consideration,” they should not be grounds for the application of Article L. 242-6 of the Commercial Code (criminal law sanction for the violation of the corporate interest by directors), other than for “disregard for the constitutional obligation for clarity and precision of the repressive provisions.” But nothing would prevent the judge from adopting a broad interpretation of a “failure to consider” social and environmental issues. A third party could have an interest in bringing proceedings against such “disregard” if it managed to demonstrate the existence of awrongful act, harm and a causal link between the two.

Another possible indicator: The (virtuous) intent of this Article 1833 al. 2 of the Civil Code: i.e., a better society for all, an open collective vision of society (traditional mantras of CSR…). If a stakeholder can prove that it has suffered harm due to a failure to consider these issues or an absence of consideration thereof, then….

This is the question: Is this article merely rhetorical, of purely symbolic value? Perhaps, and this article might simply be window-dressing, but nothing would prevent a judge from using this terse wording as an opportunity to create a concrete role for it. Indeed, what if this article were, in reality, “dynamite”? We are aware of a number of articles in the Civil Code whose succinct wording has given rise to landmark decisions (force majeure and custody of things in civil law; a number of decisions linked to the principle of relevance and proportionality for the application of clauses in labor law – on mobility, noncompetition, combating discrimination in recruitment, etc. In company law, there have been rulings on the voting rights of the usufructuary, and many more). Therefore, what if the new Article 1833 para. 2 of the Civil Code met with the same fate? What if this article gave the judge an opportunity – via well-informed stakeholders capable of justifying a legitimate interest, for example – to demonstrate that the failure to consider a given social or environmental issue related to the company’s activity had caused harm, and propose a criterion that could prioritize the stakeholders’ interests, or a definition of a responsible enterprise, etc.? A classic dismissal grounds of an insufficient legal basis could follow. For even if Article 1832 has not been amended, (Cf. Couret, D. 2017, p. 122) even if this article is now “just a token,” its spirit lives on and will continue to influence the interpretation and scope that might be attributed to Art. 1833 para. 2 of the Civil Code, which has considerable symbolic weight, with the implication of opening up the company to stakeholders, even if the latter are not expressly mentioned (while the articles of the Commercial Code do mention them). There is a good chance that between General Company Law under the Civil Code, Special Company Law, and Labour Law, there will be fertile ground to nurture many principles (shared value, interest in a healthy environment, etc.).

If this article has the potential to be “dynamite,” what safeguards should be considered to avoid collateral damage?

What Safeguards to Prevent This Article 1833 Para. 2 of the Civil Code from Becoming a Bugbear?

Answer: Involve high-potential stakeholders, such as employees, and encourage directors to develop means of taking environmental issues into consideration. Ultimately, on this aspect: Article 1133 para. 2. of the Civil Code is in its infancy. It is the proper implementation of this article that will make it a relative bugbear (cf. Art. 1844-10 of the Civil Code), an effective incentive for CSR, or mere window-dressing.

What does the future hold for Article 1833 para. 2?

What About Social Perspectives?

First point: in connection with Article 1833 para. 2 of the Civil Code. First and foremost, the social perspectives are related to “social issues.” Corporate information can be used as a basis for the “consideration of social and environmental issues,” although information should not be confused with issues.

France is ahead of the game in social matters: this includes the quality of the social dialogue and the fight against sexist behavior (Decree of 8 January 2019, for example; Order of 22 September 2017 on social dialogue). Moreover, the “family” of corporate information is the oldest and most abundant: nonfinancial reporting may be useful for listing it and retaining only those items that are relevant to the corporate interest:
  • Health and safety conditions at work

  • Occupational accidents, in particular their frequency and gravity, and occupational diseases

  • The impact of the company’s activity on employment and local development

  • The impact of the company’s activity on local or resident populations

  • Relations with stakeholders in society and procedures for dialogue with them

  • Partnership or sponsoring actions

Information relevant to combating corruption: actions undertaken to prevent corruption; Information relating to actions in favor of human rights:

(a) Promotion and observance of the provisions of the fundamental conventions of the International Labour Organization relating to:

an overview of possible social issues, cf. text with the list of corporate information.

Question: Where is the societal dimension? The societal dimension does not seem to be mentioned BUT we will see that it has its place, firstly because the text of Art. 1833 para. 2 is vague, and secondly because the second point mentions “improve the sharing of value” and above all “a fairer enterprise.” This disappointment is soon overcome; it should be noted that the societal dimension does not feature in the wording of the new paragraph 2 of Article 2 1833 of the Civil Code, while it is an intrinsic part of financial reporting. Overcome? Because corporate social governance is the major focus of this reform.


“The collective agreements reached within the company and their impact on both its economic performance and on the employees’ working conditions.”

“Actions that aim to fight discrimination and promote diversity.”

The societal dimension exists: Article 61 ter (new): Label for enterprises adopting a policy of accessibility and inclusion for people with disabilities.

Second point: The aim of the PACTE bill is to “redefine the enterprise’s place in society in order to improve the involvement of employees” and “improve the sharing of value.”

This is what it all boils down to; this is the essence of the project and even of the text. To quote B. Le Maire: “There is no profit if there is no social governance.” This text is consistent with the Order of 22 September 2017 on social dialogue. Like nested Russian dolls, social law is increasingly “embedded” in CSR.

The government bill breaks down into three parts: “liberated enterprises, more innovative enterprises, and fairer enterprises.”Here we are in the “fairer” part; the “fair and social” dimension” needs to be defined. Even if the stakeholders are not expressly included in this Article 1833 para. 2 of the Civil Code (this was provided for in the Notat-Sénart Report’s proposal, which sought to qualify employees as “constituent parties”), they are implicitly present. One of the high-potential or even super-privileged stakeholders is, of course, the employee.Nothing prevents the inclusion of employees; it is only right, and “if you can move mountains you can move molehills.” In this respect, the PACTE Lawbreathes logic into the general implementation of Article 1833 para. 2 of the Civil Code because it is based on a clear desire to create a genuine form of corporate social governance with the new system promoting employee share ownership. (Bruno Le Maire, as far back as 22 October 2017, had insisted on the SOCIAL COMPONENT: “the aim is also for employees to be more involved in the running of companies.”)

Employee shareholding could play an important role in this system, as it is considered virtuous for all parties: for employees (general benefits as part of their employee savings strategy), and for companies which see it as a way to associate employees with the company’s performance. This concerns listed and unlisted public limited companies. Moreover, the PACTE law includes a mechanism in favor of employee share ownership.

Which companies are concerned? Simplified joint stock companies. Why? Because, as things stand, certain constraints complicate employee shareholding policies for simplified joint stock companies, firstly because the minimum threshold of €100,000 for employee share offers is too high, and secondly because the maximum threshold of 150 people is too low. Today, employee share offers are only possible for a maximum of 149 employees in simplified joint stock companies, or if a minimum ticket of €100,000 is required. This restriction will be lifted in order to develop shareholdings in these companies.

As labor law currently stands, Article L. 3332-11 of the French Labour Code provides for two types of corporate contributions to payments made by their employees and to the beneficiaries of employee savings plans (PEE, PEI, and PERCO schemes). Employee savings are not the only way to encourage employee share ownership. Enterprises can also grant free share issues (attributions gratuites d’actions– AGA) and issue “business creator stock subscription warrants” (bons de souscription de parts de créateur d’entreprise– BSPCE). The PACTE Law will enable simplified joint stock companies (SAS) to propose share offers to all employees. There will no longer be a minimum ticket of €100,000. It should be noted that in committee, the Senate added several measures, including the harmonization of the corporate contribution (forfait social) at 10% for payments from incentive and profit-sharing schemes or employer contributions to pension savings plans. It has also created a new early release case for pension savings: to finance work on adapting one’s main residence in the event of loss of autonomy.

Public corporations are also concerned – an extension of the scope of transactions subject to the obligation to propose share offers reserved for employees (obligation d’offres réservées aux salariés– ORS). Share offers reserved for employees will now be mandatory for disposals of holdings by the State in unlisted companies, and disposals of holdings by the State in listed companies, on a mutually agreed basis.

Ultimately, CSR seems to be coming into effect at two speeds and the ideal situation would enable all the companies concerned to reach their cruising speeds.


  1. Malecki C (2018) Corporate social responsibility. Perspectives for sustainable corporate governance. Edward Elgard, MarsGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.University of Rennes 2RennesFrance

Personalised recommendations