Art 225 Grenelle Act II, 2010.

France Current 2010

Article 225 of the Act makes corporate sustainability reporting mandatory for companies exceeding size thresholds. The legislation, passed in 2012, requires companies to include information on their environmental and social performance, including all of the company’s subsidiaries, in their annual report—effectively turning it into the foundation for a full integrated report. The law defines the phase-in process, with large listed companies expected to comply in their 2012 reports and smaller companies (with up to 500 employees and total assets or net annual sales of €100 million) expected to comply with their 2014 annual reports. Grenelle II also requires a third-party to verify the ‘extra-financial’ information included in the report. The Decree regarding disclosure obligations for companies in 42 social and environmental fields (just a few specific indicators are mentioned) specifies that companies listing securities and companies with an annual balance or turnover of 100 million Euros and an average of 500 permanent employees are obliged to disclose certain social and environmental information as well as information relative to societal commitments in favor of sustainable development inside their annual management report. Depending on the nature of the activities or the organization, companies need to provide useful information on why certain data is not reported. The disclosed information is checked by an accredited, independent third party. The implementation schedule is progressive and depends on the size of the companies, but every company concerned needs to report for FY 2014 at the latest. The information needs to be consolidated when the company establishes consolidated statements (including companies with a non-French legal form, as long as they are a subsidiary.) Art 224 states that mutual funds have to mention in their annual report and their documentation how environmental, social and governance quality objectives have been taken into account in their investment policy. The report should explain which criteria have been assessed and how they are embedded in the decision-making process. It should also disclose how voting rights have been exercised. The decree established a presentation framework for all due information, such as: tools and methodology in place to take into account ESG objectives, ESG criteria used (including sector-specific), percentage of value of the mutual funds which take into account ESG criteria, and impact of the assessment on the investment and divestment process.


General sustainability/ESG/non-financial

Industry sectors covered by the instrument

All/none specified

Organizations covered by the instrument

All listed companies
companies with an annual balance or turnover of 100 million Euros and an average of 500 permanent employees

Issuer type


Type of instrument


Mandatory or voluntary


The geographical scope


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