Will France’s new Duty of Vigilance law push companies to improve their reporting on human rights?

Shift to release report this summer on maturity of human rights reporting in France.

15 May 2018 – Last year, France took a major step towards implementing the UN Guiding Principles on Business and Human Rights by adopting the “loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre”, commonly called the Duty of Vigilance law.

Inspired by the Rana Plaza tragedy, the Duty of Vigilance law creates an obligation for joint stock companies with at least 5,000 employees in France or at least 10,000 employees worldwide to establish, publish and implement a “vigilance plan”. Among other requirements, companies must adopt measures to identify risks and prevent severe human rights violations in their own operations and in their established business relationships.

Our research

For the past few months, we have been mapping and analyzing the disclosure of the top 20 companies listed on the Euronext Paris CAC 40 index, all companies covered by the Duty of Vigilance law. The objective of this research is to take a principled look at the state of human rights reporting in France and, more precisely, to determine whether French companies are meeting the expectations of the Guiding Principles. While the focus of our research is on reporting, it is important to reiterate that reporting provides a window, rather than a mirror, into company performance.

In phase one of the project, our analysis will set a “pre-vigilance plan” baseline against which we will evaluate improvement (or the absence of) later this year. Indeed, our analysis currently focuses on disclosure released in 2017 or early 2018, before the publication of the first vigilance plans. This fall, we will continue with phase two of the project by mapping and analyzing the disclosure of the same companies, including their vigilance plans this time.

We hope the two phases of this research project will positively influence the quality of human rights reporting in France, especially as companies think about how to fulfill their reporting obligations under the law, and in line with the Guiding Principles.

Early results

The majority of the French companies reviewed so far sit at the Improving level of overall maturity, meaning that the disclosure is still heavily focused on broad labels like “CSR” or “sustainability”, but it does at least include some information about human rights specifically.

Notably, the French companies reviewed so far perform best in the area of policy commitment. Indeed, all companies reviewed commit to respect human rights, with 60% explicitly covering all internationally recognized human rights and extending their expectations to their business relationships.

While clear human rights commitments are important, what truly matters is what companies do about them. For instance, 40% of companies reviewed do not identify who is responsible for implementing the human rights commitment or for managing human rights risks more generally, inevitably raising doubts about whether the companies are embedding respect for human rights in practice.

When it comes to human rights risk assessment, the majority of companies reviewed provide only a basic statement about the existence of processes to assess human rights risks, without further detail. It remains to be seen whether these limited descriptions will be sufficient to meet the requirement of the Duty of Vigilance law. However, it is clear that meaningful disclosure under the Guiding Principles would explain the rationale and the actual ways to assess human rights risks, with concrete examples from the reporting period.

Stay tuned for the full report to be released this summer. The report will be published in French, with a translation in English to follow. Until then, you can check out the disclosure of more than one hundred companies comprehensively mapped to the questions of the UNGP Reporting Framework in Shift’s online repository of disclosure, the UNGP Reporting Database.

For more information about this research project, contact Michelle Langlois at michelle.langlois@shiftproject.org