France is the first Member State to transpose the Corporate Sustainability Reporting Directive by an order issued by the Government on 6 December 2023. This order aims at replacing the current extra-financial performance statement (déclaration de performance extra-financière or DPEF) system by a sustainability reporting, as well as to simplify and clarify other CSR reporting mechanisms.

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Directive (EU) 2022/2464, known as the CSRD or Corporate Sustainability Reporting Directive,[1] introduced an obligation for certain companies to disclose sustainability information. It replaces Directive 2014/95/EU related to the extra-financial performance statement (DPEF) and was transposed in France on 6 December 2023 by the Order n°2023-1142 which introduces new sustainability reporting obligations (I) and a new audit system (II).

I. Many French companies will have to comply with new reporting obligations in the near future, particularly regarding sustainability  

The Order harmonized CSR reporting obligations within the French Commercial Code, particularly regarding (i) the general reporting in the management report (rapport de gestion) by listing the information it must contain,[2] such as key performance indicators of a financial and non-financial nature,[3] and (ii) specific reporting for companies operating Seveso “high-threshold” facilities[4] on their risk management,[5] as well as for companies operating in the extractive and primary forest exploitation sectors on some payments made to Countries or territories above 100.000€.[6]

 Above all, the main innovation introduced by the Order is the requirement for large companies, small and medium listed companies as well as for certain companies established outside the European Union or the European Economic Area which have a branch in France, to disclose sustainability information.[7] Such information is defined as information that “makes it possible to understand the impact of the company’s activity on sustainability issues, as well as the way in which these issues influence the development of its business, performance and position”, it being specified that “sustainability issues include environmental, social, governance and employee matters”.[8]

II. Audit of sustainability reporting will be open to a wider range of auditors, under the supervision of the Haute autorité de l’audit

The Order provides that sustainability information disclosed by large companies and listed small and medium companies will be audited by a statutory auditor or an independent third-party, and that information disclosed by foreign companies with a branch in France will be subject to a report by persons or firms authorized under the law applicable to the company, a statutory auditor or an independent third-party, expressing their opinion on the compliance of the information provided.[9]

As a result, rules governing the profession of statutory auditors have been amended to reflect this new mission of auditing sustainability information,[10] and new rules have been introduced for “sustainability information auditors” (which may include lawyers) working within independent third-parties.[11]

These new rules are based on the principle of identical rules, which means that rules applicable to sustainability information auditors are the same as those applicable to statutory auditors, with only limited exceptions,[12] to ensure fair competition, to enable them to work together, to offer stakeholders the certainty of the same requirements for each of them, and to enable a homogeneous presentation of their reports.[13]

Finally, the Order provides that statutory auditors and sustainability information auditors working for independent third-parties will operate under the supervision of an authority named the Haute autorité de l’audit (H2A), which main tasks will be to register the latter, to keep the list of registrants, to monitor statutory auditors, independent third-parties and sustainability information auditors as well as to impose penalties.[14]