France’s climate and ESG disclosure law Article 173 has been held up as a game-changer in environmental reporting by investors.
Coming before the Task Force on Climate-related Financial Disclosures (TCFD) made its recommendations, the 2016 implementation decree of the article required – on a comply-or-explain basis – that institutional investors report on climate risk, low carbon strategies, ESG integration, and contribution to the energy and ecological transition.
But after three years, how successful has Article 173 been?
A recent report from Novethic, the sustainability group that is owned by state investor the Caisse des Dépôts Group, found “passive resistance”.
Its review of disclosure efforts in line with Article 173 found that more than a quarter of the 100 largest French institutional investors are “passively resisting” the required levels of reporting.
As the paper – called 173 Shades of Reporting - puts it, “the gap is widening …