European due diligence: the new situation for businesses in France
European due diligence is a major advance in the management of ethical and environmental risks for businesses. SMEs, whether directly involved or as partners of large groups, must anticipate the concrete impact of these obligations in order to secure their business, avoid sanctions and strengthen their competitiveness.
What is the European duty of vigilance?
What is the law on duty of care?
The Due Diligence Act requires businesses to identify, prevent, and mitigate serious human rights, environmental, and governance risks across their businesses and value chains.
It was introduced in France in 2017 and is now applied at European level through an ambitious directive. The objective: to place prevention at the heart of business practice to guarantee the social and environmental responsibility of economic actors.
What is the European directive on due diligence?
The CS3D/CSDDD directive, adopted in 2024, harmonises the rules in Europe. It requires a vigilance plan, regular evaluation of partners, an alert mechanism and public monitoring of measures. All companies in the EU, but also their subcontractors and suppliers, are now affected.
Scope and companies concerned
Which businesses are targeted?
The directive mainly targets large European and non-European groups with significant activity in the EU. But for SMEs, vigilance is becoming essential: any SME subcontracting the contractors concerned must also demonstrate its compliance, otherwise it will be excluded from the markets.
Support mechanisms, in particular financial ones, are planned to facilitate this adaptation, in particular for SMEs.
French law on the duty of vigilance
The 2017 law concerns groups with more than 5,000 employees in France or 10,000 worldwide. However, practice shows that vigilance requirements apply to everyone, by a chain effect.
Concrete obligations for SMEs
The three types of vigilance to integrate
- Social vigilance: guaranteeing human rights, safety at work, eliminating child labour.
- Environmental vigilance: prevent pollution, manage resources sustainably, respect regulations on dangerous substances.
- Regulatory vigilance: comply with the law (transparency, fight against corruption — Sapin 2 law — reliable reporting).
Concrete example for an SME
Let's imagine a French SME subcontracting a large group. She must:
- Map your risks (e.g. working conditions with a foreign partner).
- Set up an internal alert.
- Integrate a vigilance clause in your contracts.
Example of a clause:
“The subcontractor undertakes to justify compliance with social, environmental and human rights regulations at first request, and to report any breach without delay. In the event of serious non-compliance, the contract may be suspended or cancelled.
Vigilance in the subcontractor/client relationship
Duty of vigilance on the part of the client
Before any contract (from €5,000 excl. tax/year), the client must check:
- Legal registration (KBIS, register of trades)
- The URSSAF vigilance certificate
These verifications are carried out upon signature and then every six months. Not complying with it exposes you to heavy penalties, and recent case law has reminded us of this on several occasions.
Due Diligence Obligations, Subcontracting and Litigation
In 2023, La Poste was convicted for failing to map risks and lack of effective monitoring. From now on, any client must prove the effective evaluation of its subcontractors and the monitoring of its measures. Responsibility is shared in the event of a breach.
Duty of vigilance and CSR
What are the interactions between vigilance and CSR?
Corporate Social Responsibility (CSR) approaches and duty of vigilance have similar objectives: risk prevention and transparency. But due diligence is a legal obligation, accompanied by sanctions and controls, where CSR is often voluntary.
Increasingly, the vigilance plan is serving as the backbone of the CSR of major groups and their suppliers.
Competitiveness and valorization
Highlighting its vigilance measures allows SMEs to distinguish themselves, to secure their customers, to access public and private markets, and to anticipate future regulatory changes.
Litigation and sanctions
Examples of litigation related to duty of care
- Total Energies, Suez and La Poste were sued for non-compliance or insufficient compliance with their vigilance plan.
- In the event of a breach, the courts may order compensation, impose a financial penalty, or order the forced publication of the decision.
Possible sanctions and civil liability
Responsibility can go all the way up to the parent company, partner or non-compliant supplier. Penalties include:
- On-call
- Fine in proportion to turnover
- Reparation of the damage caused
- Publication of the judgment
Duty of vigilance and the Sapin 2 law: coordination
The Sapin 2 law is essentially aimed at the prevention of corruption; it works in synergy with vigilance to secure commercial relationships, the choice of partners and the training of personnel.
FAQ — European due diligence
What does duty of care mean?
It is the ability to anticipate, detect and prevent major risks. This involves solid internal processes and regular dialogue with your stakeholders.
What is the French law on duty of care?
This is the law of 27 March 2017, imposing a detailed public vigilance plan on major groups.
What are the three types of vigilance?
Social, environmental, regulatory (including anti-corruption).
What is the European Due Diligence Directive?
It is a European standard from 2024 that defines a common and prescriptive methodology, to be respected by all the companies concerned and their partners.
Does the duty of vigilance apply to subcontracting?
Yes. The client must ensure the compliance of its subcontractors and integrate precise contractual clauses.
Why is vigilance essential for SMEs?
To access certain markets, secure contracts, strengthen trust, avoid sanctions, anticipate legislation, and develop a responsible brand image.
What recent convictions highlight the duty of vigilance?
Example: La Poste in 2023 (lack of risk mapping) and Total Energies (litigation on a project in Africa).
Duty of vigilance and the Sapin 2 law: what is the difference?
Vigilance focuses on human rights and the environment; the Sapin 2 law targets the fight against corruption. The mechanisms intersect in the compliance policies of major groups.
In what way does duty of vigilance complement CSR?
It gives it legal force; CSR becomes, in fact, enforceable and controllable, improving transparency and trust.
Comparative table
Why use a lawyer?
This regulated subject requires a tailor-made analysis: the lawyer takes care to anticipate all the consequences, to secure your relationships and to update your practices according to regulatory developments or current case law. He assists you in drafting clauses, managing risk and responding to any formal notice.
Conclusion
European due diligence is no longer an option: it is a competitive advantage, a bulwark against litigation, a strong signal sent to its customers and partners.
Do not be constrained, make it a strategic lever for your development!
Article written by Guillaume Leclerc, lawyer in commercial contracts and commercial litigation in Paris.
