The French Ministry of Justice has announced that the Corporate Sustainability Reporting Directive (CSRD) will be transposed into law in early December, making France the first EU member state to set a deadline for the implementation of the directive.
The announcement was made by Rémi Decout-Paolini, director of the ministry’s civil business and law reform division, at an event hosted by French auditing regulator H3C (High Council of Auditors) and the French institute of statutory auditors CNCC.
France’s draft law is expected to be submitted to the Council of State, which advises the government on the preparation of laws and decrees, within one month, and come into force at the beginning of next year.
France has been one of the leading member states on efforts to implement the EU’s new sustainability reporting rules, with the parliament authorising the government last March to proceed with work on transposing the directive into law over a period of nine months. Three months later, the Ministry of Justice’s civil business and law reform division consulted stakeholders on a preliminary draft law.
All EU member states are required to transpose the directive into their national laws and bring into force the necessary regulatory and administrative provisions by July next year.
However, one person working closely on CSRD assurance developments told Responsible Investor that the directive’s implementation should be viewed as “a moving target”.
They added that the most recent information is that Finland, Norway and Sweden have full draft CSRD transposition proposals, with partial drafts ready in a number of other states.
“Some member states have experienced difficulties with transposing the CSRD into law due to political uncertainties, so have said that they will need more time,” Patrick Parent, director at H3C, told RI. “It may mean that some will only finalise it by June next year.”
Decout-Paolini acknowledged in his speech the “considerable challenge” European companies will be facing, with most having to invest in “significant resources” in order to meet the requirements of the new rules.
Reporting under CSRD is due to begin next year, covering the 2024 financial year, with the first limited assurance engagements to start in 2024.
Decout-Paolini said that any organisations in France assuring CSRD reporting will be required to follow a training course on sustainability approved by H3C, which will oversee the work.
H3C, which up to now has only regulated financial auditors, is due to change its name to the High Authority for Audit (H2A) to reflect its oversight of both financial and independent assurance providers, in light of its increasing role in sustainability assurance work.
It published guidance on CSRD assurance this summer in the absence of a European standard for limited assurance on sustainability reporting.
French companies will either use their financial auditors, a different auditor, or an independent assurance provider for CSRD assurance.