Duty of care: confirmation on appeal of the procedures for implementing human rights and environmental obligations incumbent on companies (CA Paris, June 17, 2025, RG n°24/05193)

In this case, the company was accused of having published a vigilance plan that did not meet the requirements of the French law of March 27, 2017.[1]

France was the first country to adopt legislation imposing a due diligence obligation on companies exceeding certain thresholds so as to prevent adverse impacts on human rights, fundamental freedoms, health and safety, and the environment, and to provide remedies when adverse impacts occur. Along with legislation that followed from other countries, French law contributed to the will for harmonization of this requirement at the European level, which led to the establishment of the Directive of June 13, 2024 on corporate sustainability due diligence (known as the “CS3D” and currently under discussion for simplification).[2]

As a reminder, French law on due diligence was enacted in response to the collapse of the Rana Plaza building in Dhaka, Bangladesh, in 2013, with the aim of increasing corporate accountability for the practices of companies’ subsidiaries and contractual partners. It applies to any French company that employs at least 5,000 employees within the company and its direct or indirect subsidiaries with registered offices in France, or at least 10,000 employees within the company and its direct or indirect subsidiaries with registered offices in France and abroad.

The company shall then establish and implement a vigilance plan, which shall include “reasonable due diligence measures that shall be appropriate to identify risks and address adverse impacts to human rights and fundamental freedoms, health and safety, and the environment, that result from the activities of the company and those of the companies it controls (…), as well as the activities of subcontractors or suppliers with which an established commercial relationship is maintained (…).”

This plan, which is supposed to be developed in association with the company’s stakeholders, shall include several measures: (i) a map of risks; (ii) procedures for regular assessment of the situation of subsidiaries, as well as relevant subcontractors and suppliers; (iii) appropriate actions to mitigate risks or prevent serious adverse impacts; (iv) an alert mechanism and system for collecting reports related to the existence or realization of risks, to be established through dialogue with the representative trade unions in the company; and (v) a monitoring system of the implemented measures and an assessment of their efficiency.

On December 5, 2023, the Paris Court of first instance held that the company’s vigilance plan did not meet the legal requirements.

The court ordered the company to complete its vigilance plan to make it compliant. On June 17, 2025, the Paris Court of appeals confirmed the initial judgment by providing some useful guidance on methodology.

This legal action is not an isolated one. Other legal actions have been initiated, by NGOs, local authorities and/or unions and employees (depending on the cases) against French multinationals on the basis of alleged adverse impacts on human rights, health and safety and/or the environment. Decisions in these cases are also expected to build case law applicable to various situations ranging from the practices of direct or indirect subsidiaries to those of certain subcontractors or suppliers.

The confirmation of criticisms made by the Court of first instance and guidance on methodology

Concerning the mapping of risks, the Court of first instance had noted that the company’s mapping was too general and did not prioritize serious risks. It ordered the company to clearly organize those risks in a hierarchy. This was confirmed by the Court of appeals, which noted the essential nature of this prioritization for the prevention and management of these risks. The Court provided some guidance on methodology to carry out this mapping. It underlined inter alia that:

• Although the law provides that “company stakeholders should be involved in developing the vigilance plan and thus encourage dialogue and exchange,” no requirement to set up a dialogue is imposed at the stage of risk mapping;
• “The law does not require the plan to communicate on all risks;”
• However, the plan “shall highlight – during this essential first step – risks that present the highest level through a mapping that identifies, analyzes, and prioritizes them, distinctly and independently of the measures implemented;”
• This mapping “can be done in a synthetic but nevertheless precise manner;”
• It shall “identify the general areas where negative impacts are most likely to occur and be most serious.“

Concerning the procedures for the assessment of subcontractors, the company described in its vigilance plan “a mechanism for controlling its suppliers and subcontractors in three phases consisting in a questionnaire to be completed by them, an audit of documents conducted remotely by an AFNOR expert, then on-site audits”. However, the Court of first instance had ruled that the procedures for the assessment of subcontractors had to be revised due to their inadequacy and to the failure to consider the risks mapping. The Court of appeals approved this analysis, adding that preventive actions had to be adapted to specific risks.

Concerning the requirement to consult with trade unions as part of the alert mechanism, the Court of first instance had found that the company had not fulfilled this obligation. The Court of appeals specified inter alia that:

• Dialogue with trade unions shall occur before developing the alert system so that all concerned parties can participate. Thus, “establishment through dialogue differs from a simple consultation on a predefined project and presupposes a transmission of information elements and an exchange of views and proposals on the drafting of the content and implementation of the mechanism to be established (…)”.
• The burden of proof for establishing a dialogue with trade unions before developing the alert mechanism lies on the company.

Finally, concerning the publication of a monitoring system for the follow-up of measures of vigilance, the company had implemented a table of indicators supplemented by a brief overview of trends. The Court of first instance found that this monitoring system did not provide enough details, because it briefly and randomly presented certain measures included in the plan with an analysis focused only on two specific subjects, to which two separate assessments were added. According to the Court of first instance, this system did not provide for a proper assessment of the efficiency of the measures, nor did it serve as an assessment to guide due diligence actions. The Court of appeals validated this reasoning and specified that the monitoring of due diligence policies shall enable to specifically assess the impact of the measures.

A court decision rendered on the basis of French law while waiting for the finalization of a revised version the European Directive on due diligence

As the Court of appeals emphasized, its decision only applies current French law on duty of vigilance, not the Directive of June 13, 2024 on corporate sustainability due diligence.

Indeed, this Directive has not yet been transposed into French law and provides for a phased entry into force starting from 2027, but more importantly, a “simplification” proposal within the framework of “Omnibus” Directives proposed by the European Commission has been made to revise the text and is currently under debate at the level of the European Parliament and the EU Council.

However, even though the European Directive is not yet applicable, the Court of appeals noted that the duty of loyal cooperation provided for in the Treaty on European Union implies that “national courts must refrain, as far as possible, from interpreting national law in a way that would seriously compromise, after the transposition deadline, the achievement of the objective pursued by the directive.“

As a result, the Court of appeals pointed out that its analysis of risk mapping is in line with Articles 8 and 9 of the Directive on the identification, assessment, and prioritization of actual and potential adverse impacts.

Anyway, the implementation of the European Directive on due diligence will require adaptations to French law. The Directive will include foreign companies inti the scope of due diligence (a principle maintained in the current state of discussions on the revision of the Directive). Even if the thresholds for the application of the Directive are currently under debate, it is recommended that these companies already anticipate the upcoming application by taking into account the suggestions of modification that are currently being discussed.

At the same time, it is recommended that French companies review their vigilance plans in the light of the comments of the Court on methodology. Failing this, beyond reputational risk, they would be exposed to injunctions under penalties, or even damages in case of legal actions for civil liability on the basis of adverse impacts on human rights, health and safety, and/or the environment. Companies that are required to comply with due diligence requirements shall thus look for strong advice on this new legal track with high stakes.

Sources

• CA Paris, June 17, 2025, No. 24/05193
• Directive (EU) n°2024/1760 of June 13, 2024
• Law of March 27, 2017: https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000034290626/
• Website “Le radar du devoir de vigilance”: https://plan-vigilance.org/
• Lexis Nexis JCP E – « La directive CS3D limite les distorsions susceptibles de défavoriser les entreprises européennes », 3 questions to Rodolphe Boissau and Anne-Marie Pecoraro, https://www.uggc.com/lexis-nexis-jcp-e-la-directive-cs3d-limite-les-distorsions-susceptibles-de-defavoriser-les-entreprises-europeennes-3-questions-a-rodolphe-boissau-et-anne-marie-pecoraro-2/

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[1] Law No. 2017-399 of March 27, 2017 relating to duty of vigilance of parent companies and ordering companies, which creates Articles L. 225-102-4 and L. 225-102-5 of the French Commerce Code

[2] Directive (EU) 2024/1760