French law on CSR due diligence paradox

Abstract

Purpose The purpose of this paper is to analyze the functioning of the French Law No 2017-399 relating to the duty of vigilance of parent companies and ordering companies, a law defended by labor unions and non-governmental organizations (NGOs) as an answer to the ineffectiveness of corporate social responsibility (CSR) mechanisms of multi-national corporation. Design/methodology/approach The authors try to determine to what extent the new mechanisms brought by this law could improve or not the failure of existing CSR mechanisms. Findings The authors find out that internal weaknesses of the law, which is based on voluntary CSR instruments and without penalties, internal mechanisms of the French judicial system or external economic factors, might considerably limit the effectiveness of the law. Originality/value Even if for the first time, French judges might be asked to evaluate the reasonableness of the CSR practices of firms, one of the paradoxical effects of this law might be to institutionalize soft law mechanisms such as CSR certification or reporting, the proponents of this law precisely wanted to get rid of at the origin.

The German Supply Chain Due Diligence Act: impacts on sustainable supply chain management from a stakeholder perspective

“…From a theoretical viewpoint, it is apparent that there are certain overlaps between the legal flaws of the GSCDDA and those determined in previous due diligence law implementations. For instance, insufficient penalties and mechanisms to prosecute human rights violations in-depth lead to gaps in effectiveness (Delalieux and Moquet, 2020; New, 2015). This literature also refers to conflicts with existing legal systems and economic pressures. Bypassing responsibility: In the GSCDDA discourse, it is repeatedly mentioned that the transfer of responsibility for human rights to companies resembles bypassing of responsibility (C2) by governments.…”

“…how internal audit and certification processes operate) and external origin (i.e. the environment in which auditors and certifiers operate) (Delalieux and Moquet, 2020). More inclusive quality features and certification systems that involve disadvantaged stakeholders and are built on trust could be derived as a solution (e.g.…”

The interrelationship of marketing, accounting and auditing with corporate social responsibility

“…The provision implements by amending companies act of that country. CSR audit is an assessment of the company's performance with CSR objectives (Delalieux and Moquet, 2020; Jackson et al , 2020). CSR audit may include CSR spend (Welbeck et al , 2020), CSR non-spend (Bhatia et al , 2020), CSR underspend (Acharyya and Agarwala, 2020), CSR overspend (Muhammad et al , 2019).…”

“…Our findings confirmed previous research articulating about CSR auditing. Statutory reporting to stakeholders about CSR to ensure fair financial statements through auditing by competent and independent professionals (Delalieux and Moquet, 2020; Gunn et al , 2019; Niyommaneerat et al , 2018). Information communication technology is a new trend to accounting and auditing even for CSR (Thottoli et al , 2019a; Thottoli et al , 2019b; Thottoli et al , 2019c; Thottoli and Thomas, 2020).…”

An Integrated Framework of Good Corporate Governance in the Egyptian Stock Exchange

“…These explanations form a distinct section within the corporate governance report. On the other hand, the German code operates on a comply-or-explain basis, implying that companies are only expected to comply with the recommendations, or alternatively, deliver a detailed rationale for any deviations from the recommended practices (Delalieux & Moquet, 2020).…”