France proposes shareholder approval on corporate climate plans

July 28, 2023|Written by |Autorité des marchés financiers

The French national assembly has adopted an amendment to its green industry bill, making it the first country to propose mandatory climate plans for companies.

The Say on Climate amendment requires companies to disclose climate plans to shareholders every three years with an advisory vote and annual shareholder approval on how the strategy is being implemented. Requirements for the annual report will be set by the French council of state.

The plans are mandatory but non-binding, so companies can set their own decarbonisation and transformation strategies while also meeting the information transparency needs of stakeholders, the national assembly stated.

The proposed law incorporates recommendations made by the French financial regulator Autorité des Marchés Financiers (AMF), which had proposed making Say on Climate mandatory for all companies subject to the European corporate sustainability reporting directive. The commission had also suggested increasing the AMF’s powers if climate plans are not included on the agenda of company annual general meetings.

A majority of French MPs voted in favour of the amendment during a second vote on 21 July, after being rejected earlier this month. The amendment still needs to be discussed as part of the wider industry bill before being debated for a final time in October.

The amendment was largely supported by investment forum SIF in a bid to improve shareholders’ say on company objectives. Several investors, including Mirova, Sycomore Asset Management, and Préfon, signed a letter to president Emmaunuel Macron and industry minister Roland Lescure to urge them to support the bill. However, major asset managers such as Amundi, AXA Investment Managers and BNP Paribas Asset Management, did not sign the letter.

recent study found that French citizens have a growing interest in sustainable investments, especially those under 35, which also represent about half of those who have subscribed to sustainable funds since 2022. Around 75% of those surveyed said they consider the environmental impact of investments an important subject. Marie-Anne Barbat-Layani, president of the AMF, said the findings are an “encouraging signal” towards using private money in financing the green transition, .

French financial regulators and the Banque de France have made more headway in tackling climate change than other G20 countries. France received the best score in Green Central Banking’s scorecard, with a ranking of B-.

This page was last updated July 28, 2023

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