Association Nationale des Sociétés par Actions (ANSA)

The entity agrees that a legal framework is needed due to the benefits it would bring and advocates for a principles-based approach to the due diligence duty; however, the entity does not entirely agree with the definition of due diligence.

In response to question 2 it agrees that a legal framework is needed, referring to the benefits indicated in its response to question 3, which include levelling playing field, a non-negotiable standard would help companies increase their leverage in the value chain, and harmonisation to avoid fragmentation, among others. It however, does not entirely agree with due diligence duty definition proposed (question 14) as it considers it too broad.

Although the Company is in favour of an horizontal approach covering all sectors, it considers that all SMEs should be excluded.

In response to question 15, it states: 'At first sight, we would rather favour combining a horizontal approach extending to all sectors with a specific theme centered exclusively on human rights, which are undisputed and the protection of which is based on objective criteria'. In response to question 16, that asks how smaller companies can have a reduced burden, it states that all SMEs should be excluded: 'Any EU initiative should exclude SMEs as it is already the case under the French "due diligence" law. Applying the EU thresholds for SMEs which are very low, would create a disproportionate burden on them. And above all, SMEs often have to meet ESG information requirements from their own customers conducting supply chain due diligence, not to mention the information they provide as investees or borrowers to financial institutions'.

Although the company describes how it would enforce compliance, it is not clear what would be the actual enforcement measures.

In response to question 19a, the entity does not pick one of the predefined options. Instead, it indicates that: 'The best option would be to set up an independent third-party authority at national level ensuring compliance with due diligence obligations' However, it is not clear which tools could it use to enforce it (sanctions, fines, etc.).

The Company disagrees 'to some extent' that corporate directors should be required to establish procedures to ensure that risks and impacts on stakeholders are identified, prevented and addressed.

In response to question 7 on directors duty and harms on stakeholders, the entity states that it disagrees to some extent and argues that: 'We note that companies already implement such procedures. Setting an EU-broad requirement would level the playing field, bearing in mind that its scope should be kept to a minimum and leave companies sufficient flexibility in setting up their procedures .... It is necessary to clarify that the company’s management bears the duty to set up such procedures, not the board who confines itself to overseeing their implementation. It follows that the company, rather than directors, might be held liable for their proper application'.

Although the entity does not respond directly to the requirement of grievance mechanisms for all stakeholders, it strongly disagrees with a requirement to establish mechanisms for stakeholder consultation.

The entity does not respond to the question whether there should be grievance mechanisms as part of due diligence duty (question 20c), but strongly disagrees to the requirement of establishing consultation channels for engagement with stakeholderes in due diligence duty (question 20a). It argues that: 'Owing to their heterogeneity, a "one size fits all" approach to stakeholders' consultation would not be deemed appropriate. Experts cannot be consulted in the way employees are. In addition, due account should be taken of each company’s specific circumstances'. Finally, the entity does not refer to the relevancy of some of the stkaeholders presented by the consultation (question 5).

The Company doesn't consider this a suitable option as enforcement mechanism.

Question 19a asks about enforcement mechanisms through a multiple-choice format, one of which is: 'judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations'. The company did not select this as one of its preferred measures.

The entity does not oppose to the requirement of due diligence, but does not enterely agree with the definition, proposing significant objections, including the entities that should be subject to it and the parts of value chain that should be excluded.

In response to question 14, on whether the entity agrees with the due diligence duty definition proposed, it states: 'We cannot fully agree with the proposed definition, which is too broad. First, it needs to be specified as it not only refers to a process to assess business risks and try to mitigate them but also implies a standard of conduct, which in this case is an obligation of means. Second, based on the French legislation’s example, it should not extend to clients and be restricted to upstream suppliers. Third, due diligence should be carried out in a proportionate manner and subject to considerations of materiality tailored to fit each company’s specific circumstances. Last, we consider that the notion should only apply, as it is the case in France, to companies governed by the law of a Member state or established in the EU with more than 5 000 employees'.

The entity agrees 'to some extent' with this requirement. It explains its objections and does not take position in relation to relevancy of some stakeholders.

The entity agrees 'to some extent' with question 6 on whether companies (their directors) should be required by law to identify stakeholders and their interests. However, explaining its choice, the entity indicates that: 'It is impracticable to provide a global definition of stakeholder's interests, owing to (i) their diversity and (ii) their heterogeneity even within the same category. ... The "one size fits all" model would be ill-suited to such an endeavour. Each company's approach needs to be determined by its purpose, culture and values'. In addition, it only highlights the relevance of shareholders and employees. It leaves blank the responses on whether other stakeholders are relevant, including employees and communities in the supply chain, customers and persons and communities affected by the operations of the company.

The entity strongly disagrees with this requirement.

The entity strongly disagrees with the requirement for directors to establish consultation channels for stakeholder engagement within the due diligence duty (question 20a). It argues that 'Owing to their heterogeneity, a "one size fits all" approach to stakeholders' consultation would not be deemed appropriate. Experts cannot be consulted in the way employees are. In addition, due account should be taken of each company’s specific circumstances.' Finally, the entity does not comment on the relevance of some of the stakeholders listed in the consultation (question 5).

Although the entity states that it agrees to some extent with this requirement, the explanation shows objections or opposition to different elements.

The entity agrees 'to some extent' with question 6 on whether corporate directors should be required by law to manage the risks of the company in relation to stakeholders and their interests. However, explaining its choice, the entity indicates that: 'First, there is an issue about the distribution of responsibilities between executive officers and directors and the board of directors. Companies and the board entrusted with this task usually identify the most relevant stakeholders. But if the board has to ensure that risks are adequately accounted for, it does not mean that it needs to manage them directly. ... Third, it is impracticable to provide a global definition of stakeholder's interests, owing to (i) their diversity and (ii) their heterogeneity even within the same category. ... The "one size fits all" model would be ill-suited to such an endeavour. Each company's approach needs to be determined by its purpose, culture and values. After completing the identification process, companies need to weigh up their key stakeholders' interests when taking strategic decisions, including preventing and, if needed, mitigating the risks they may pose'.