• Insights

Environmental commitments in French companies: a new role for the Social and Economic Committee?

Written by
Capstan Avocats, the law firm setting the benchmark for labour law in France.
Authors
Marie-Pierre Olive
Associate - France
Capstan Avocats
France
23.07.21
5
The French Citizens’ Climate Convention came up with a number of proposals to help France meet its Paris Agreement commitments. Now a new law will implement the proposal on environmental transformation in companies, with an enhanced role for the Social and Economic Committee, the body representing employees’ interest in French companies.

France has set itself the objective of reducing greenhouse gas emissions by 40% compared to 1990 levels by 2030, before achieving carbon neutrality by 2050 in accordance with Paris Agreement commitments. To develop the public policy needed to achieve this first step in a spirit of social justice, the government called on the direct and unprecedented participation of 150 French people in the Citizens’ Climate Convention.

The French Parliament has definitively adopted a bill ‘to combat climate change and strengthen resilience to its effects’ (available here in French) including proposals from this convention requiring legislative intervention.

A stronger environmental role for the Social and Economic Committee

As soon as it was presented, the draft law was criticised by the Convention’s citizens, who noted its lack of ambition and the distortion of their proposals on everyday issues (travel, consumption, housing, production and work, and food).

The same cannot be said of the plan to transpose the citizens’ proposal into the Labour Code (Proposal PT 4.2). It aims, in particular, to strengthen the role of the Social and Economic Committee (CSE), the staff representative body, ‘in the transition of the company’s products and processes to low-carbon’. This would take place through:

  • consultation on company strategy and social policy;
  • mandatory annual negotiations on forward-looking management of jobs and skills (known as GPEC).
GPEC negotiations

The CSE is not, of course, an organisation’s natural negotiating partner. However, the bill reflects the spirit of the initial proposal with additional provisions on mandatory GPEC negotiations at branch and company level.

These proposed negotiations respond specifically to the challenges of green transformation. Neither the scope of mandatory negotiation (which applies to companies with 300 or more employees and groups with 300 or more employees) nor its frequency (three-yearly, unless otherwise agreed) would change.

This clarification will not lead to any major upheaval with regard to the main purpose of GPEC: to anticipate the consequences of future changes on employees. Rather, it makes it possible to raise awareness of the changes required to effect an ecological transition and their impact (positive and/or negative) on the company’s activities and its employees, and the need to prepare for these changes.

In addition, the bill makes strengthening of the role of the CSE part of the ecological transition of the organisation.

Information and consultation

The bill includes a great deal of specific information and consultation on the environmental consequences of measures.

The general obligation to consult the CSE on issues concerning the general running of the company (which applies to companies with 50 or more employees) is exceptionally wide, so the need to legislate specifically for consultation in relation to green transformation is doubtful.

A structure for social dialogue integrating the challenges of the ecological transition already exists (if a planned project includes these elements), through committees set up in agreements for establishing CSEs, in environmental criteria in profit-sharing agreements, etc.

However, the government considers that the Labour Code needs to be amended to ensure the goal of the citizens’ proposal is met. The CSE will become a player in the fight against climate change and to this end, specific resources would be made available to it.

Given the multidisciplinary nature and importance of this subject, ecological transformation affects all CSE consultation, both one-off and recurrent. The committee should be informed and consulted specifically on the environmental consequences of measures envisaged, when it is informed and consulted on matters concerning the organisation, management and general running of the company. This would arise in particular in relation to:

  • measures likely to affect the size or structure of the workforce;
  • modifications of its economic or legal organisation;
  • employment and working conditions, in particular working hours, and vocational training;
  • the introduction of new technologies, any major change in health and safety conditions or working conditions;
  • measures taken to facilitate the introduction, return or retention in work of people injured at work, war invalids, civil invalids, people suffering from chronic progressive diseases and disabled workers, particularly with regard to the adaptation of workstations.

 

Each specific consultation should therefore deal with the environmental impact of the planned project.

This transversal approach is also applied to the three recurrent consultations (on strategic orientations, the economic and financial situation, the company’s social policy, working conditions and employment). During each of these consultations, the committee should be informed about the environmental consequences of the company’s activity. No deviation from this by agreement will be possible: this provision would be part of the company’s public order commitments.

Resources

Ultimately, environmental impact should become omnipresent for any CSE consultation.

The economic and social database (BDES) will be renamed ‘economic, social and environmental database’. It would be reinforced with a new theme on ‘the environmental consequences of the company’s activities’, which would be compulsory even if there is a contractual derogation. The information to be made available in this context could usefully be adjusted by agreement according to the company’s activity. Failing that, a decree would set out the information required.

The mission of the chartered accountant to whom the CSE can have recourse for recurrent consultations will be extended to cover the environmental consequences of the company’s activity. For each recurrent consultation, the expert’s mission will cover ‘all the economic, financial, social or environmental elements’ necessary, in the circumstances, to understand the strategy, financial situation or social policy. The use of an environment expert has been rejected.

Economic training for members of the ESC could be extended to cover the environmental consequences of companies’ activities.

CSE involvement but no binding powers

The planned amendments to the Labour Code would make it possible to measure the expected contribution of companies to the collective effort to meet the climate challenge and to participate in accelerating green transformation. The CSE will be actively involved in its consultative role, without binding powers. An amendment which would have allowed the CSE to require an ecological transition plan from the employer was rejected.

The strengthening of the CSE’s powers is also in line with the definition of the company in the PACTE Act (the Action Plan for Business Growth and Transformation), which transcends the interests of partners and profit maximisation. Under the terms of Article 1833 of the Civil Code, a company is ‘managed in its corporate interest, taking into consideration the social and environmental issues of its activity’. Managers must take these issues (risks and opportunities) into consideration in management decisions and in the development of company strategy, on which the CSE is consulted.

The impacts of the CSE-related provisions in terms of emissions avoided or offset will not be measurable, but managers and HR directors should very quickly implement and observe the changes it brings, and be prepared to debate with the social, economic and environmental committee.