Corporate Compliance with the Devoir de Vigilance Law, UNGP Conformance, and Transparency in Vigilance Plans published in 2019.
Find out where your company stands.
Passed in 2017, the French Devoir de Vigilance law (LOI n° 2017-399 du 27 Mars 2017) is the only “legislative example to date which imposes a general mandatory due diligence requirement for human rights and environmental impacts.”*
This legislation notably obliges large, publicly-traded companies above a certain threshold of employees to undertake mandatory due diligence comprising five specific measures (risk mapping, evaluating commercial partners for risks, risk prevention and mitigation, setting up an alert mechanism, and monitoring and evaluating implementation). Furthermore, companies’ Vigilance plans must be developed in association with civil society stakeholders and be published along with an implementation report (compte rendu). Moreover, the law strengthens the accountability of parent companies for the actions of subsidiaries, imposes civil liability in case of non-compliance, and allows stakeholders with a legitimate interest to seek remedy or injunctive relief in the case of a violation of the law.
With funding by iPoint-systems, in June of 2020, not-for-profit organization Development International e.V. released the most systematic study to-date assessing the 134 confirmed in-scope French corporations under the law. Each statement, published in 2019 and concerning 2018, was subject to rigorous analysis on the basis of 42 key performance indicators comprising 3 dimensions: the degree of legal compliance (17 indicators), UN Guiding Principles conformance (14 indicators), and disclosure transparency (11 indicators).
The study found that while many of the essential requisites of the law are met, most companies were identified to have legal compliance gaps that could, inter alia, leave them vulnerable to legal challenges. Generally, corporate duty of care reporting is still immature, especially with regard to UNGP performance and disclosure transparency. While the study detects a reforming effect due to the law, it simultaneously points to the need for improvement. In light of the considerable public interest, subject companies would do well to address the shortcomings identified in this study.
* The Study On Due Diligence Requirements Through The Supply Chain was conducted by the British Institute of International and Comparative Law on behalf of the European Commission (p. 19).
In collaboration with iPoint, Development International will be presenting the key findings of the study in a one-hour webinar. There will also be room for your questions. Register now, and we'll keep you informed about the date and time of the webinar.
For each evaluated company, a Corporate Scorecard has been created, showing how the evaluated companies scored on key performance indicators in each of the three dimensions:
Legal compliance;
UN Guiding Principles conformance;
Disclosure transparency.
