Is Corporate CSR Reporting an Expression of 'Law’s Being' or of Lobbying? How Much Power Does Law Really Have? Debates and Criticism Around the Latest French Reform

Abstract

This study seeks to improve our understanding of how business interests can influence the making of legislation in the specific sector of corporate law and corporate social responsibility (CSR). We want to make the public aware of the legal limits of CSR reporting flowing from the way companies and policy makers are linked through lobbying. This paper is based on a critical study of the new requirement concerning corporate non-financial reporting (Commercial Code Article L. 225-102-1 and the draft decree) and on the debates following the 12 July 2010 adoption of new French Act No. 2010-788, which defines national commitments to the environment. France did not hesitate to take a bold position through the content of Commercial Code Article L. 225-102-1. While this new article strengthened the opening of French companies to environmental and societal issues, the lobbying with respect to the draft decree has curtailed the legislator’s great ambitions and undermined the promising reflections on CSR which emerged during the Grenelle process. French legislators have stumbled in their efforts to orient companies with respect to exercising power on behalf of their stakeholders. New Article L. 225-102-1 amends the Commercial Code and aims both to extend the reach of annual non-financial reporting on the consequences of companies’ activities with respect to the environment and to ensure the pertinence of such reporting. Nevertheless, the discussions on the draft decree reveal the gap between, on one hand, companies’ claims to be willing to assume “more CSR” and, on the other hand, their lobbying. The time is ripe to integrate the new political role of private business in regulation.