Engie

The statement appears supportive of a mandatory HRDD legislation. However, it does not represent a proactive call for legislation.

The entity states that 'In France, Loi de Vigilance was introduced in 2018 which obliges companies to assess the social and environmental impact of companies’ activities and in its supply chain in order to identify potential social and environmental risks and take reasonable measures to mitigate these risks. In addition in 2019 “loi Pacte” was adopted which modified the civil code in order to assert their social and environmental role and provide them with a true “raison d’être” (purpose). Both laws create and promote a sustainable long-term business creation. Indeed, this law enshrined a practice which had de facto existed before, without seeking to define what the company interest (“intérêt social”) was, leaving it to case law. However, we consider that there is a need to implement an obligation at European level to assess the social and environmental risks of the companies' activities and in its supply chains because it will create a level playing field for European based companies active in Europe and around the world. The law should leave enough flexibility to adapt itself to the complex environment companies face in their daily operations' .Question 2: Yes, an EU legal framework is needed. Question 3: ENGIE is aware of possible social and environmental impacts of its activities and in its supply chain. An EU legal framework which obliges to assess the social and environmental risks will help to increase the awareness of potential social and environmental risks. European companies alone cannot solve all problems arising from failing States in which protective laws are either inexistent or not applied. An EU legislation and its effective implementation will principally allow to create a level playing field within the EU and the EU based companies which are active around the world. In addition it will avoid fragmentation due to diverging national laws. Question 15: None of the above, please specify: ENGIE supports an approach which would be somewhere in between option 1 and option 2. This approach recommends that the due diligence obligation should be cross-sectorial and based on key process requirements. In addition, we believe that mandatory due diligence should focus on very specific and clearly defined human rights and environmental risks. • Human rights risks, including social issues, should be defined by reference to the Charter of Fundamental Rights of the European Union (CFR), to UNGP, i.e. rights expressed in the International Bill of Human Rights coupled with the principles concerning fundamental rights in the eight ILO core conventions as set out in the Declaration on Fundamental Principles and Rights at Work. Such definitions shall be easily readable and unequivocal. ...

The statement indicates support for cross-sector and extraterritorial coverage. However, the entity appears to suggest a caveat for SMEs, which it says should be mainly excluded.

Question 15: "ENGIE supports an approach which would be somewhere in between option 1 and option 2. This approach recommends that the due diligence obligation should be cross-sectorial and based on key process requirements." ...Question 16: SMEs should be excluded with some exceptions (e.g. most risky sectors or other);SMEs should be subject to lighter requirements (“principles-based” or “minimum process and definitions” approaches as indicated in Question 15);SMEs should have lighter reporting requirements; Toolbox/dedicated national helpdesk for companies to translate due diligence criteria into business practices. Please explain your choice: "We generally agree that some minimum requirements for supply chain due diligence could be beneficial depending on the characteristics and scope of such requirements."

While the entity does not opt for any of the presented options, it nonetheless supports introducing a mechanism of enforcement.

Question 19a: From a practical point of view, as the legislative framework is likely to cover a large number of undertakings, it is difficult to see how national authorities, even the most staffed ones, may supervise, in an effective way, all companies subject to the due diligence requirements. As an alternative, we advocate for the possibility to designate an independent third party explicitly accredited for verifying due diligence information published by undertakings. This would be a coherent addition to the verification of non-financial statements, already required in some EU Members States and envisaged by the Commission in the context of the revision of NFRD. A rigorous process of accreditation of these independent third parties by one of the signatories of the European Accreditation Multilateral Agreement (EAMLA), could be put in place in order to guarantee the quality, legitimacy and credibility of such verification.

The entity appears to point to existing legislation and claim that additional legislation should be avoided.

Question 6: The company indicates 'I agree to some extent' as answer to all sub-questions. "First of all, we would like to highlight that stakeholder consultation is a good practice. ENGIE has established different forms of stakeholder dialogue. Regarding the identification of company’s stakeholders, we are aware that we can only grow if we take into account the ecosystem in which we operate, and which is made up of many different stakeholders. This is why ENGIE identifies its key stakeholders and conduct dialogue with up to hundreds of them on a continuous or on an ad-hoc basis in order to compare their expectations with the company’s strategy (materiality analysis). There are as many ways of identifying stakeholder interests as there are companies (local vs. centralised identification, thematic vs. generic identification…). Regarding the management of the risks and opportunities in relation to stakeholders, we recall that the first mission of the Board is to determine the strategy of the company, considering the risks it is confronted with and the opportunities it has identified. Integrating and reporting on risks factors are key components of corporate stewardship and have already been included in EU legislation for a long time. In accordance with the Accounting directive, the management report shall include “a fair review of the development and the performance of the undertaking’s business and of its position, together with a description of the principal risks and uncertainties that it faces”. The NFRD has notably extended the scope of this risk assessment by requiring companies to publish a non-financial statement which is, in France, part of the management report and therefore falls under the responsibility of the Board of Directors. Consequently, we consider that the framework regarding the integration of sustainability risks, impacts and opportunities is already in place and efficient. This framework will certainly be strengthened following the review of NFRD and overlapping legislation should therefore be avoided." Question 7: I disagree to some extent. Please explain 2: "It is a task for management which must fulfil this duty by developing a risk map allowing for the identification, assessment and prioritisation of sustainability-related risks. Regarding targets, ENGIE has already set up ambitious targets on ESG issues (eg. regarding the reduction of CO2 emissions or waste, gender diversity etc.). However, the choice and timeline of such targets should remain at our discretion. Good practice within the non-financial statement is to disclose voluntary targets, the dedicated resources for their implementation and the methodologies allowing to take into account uncertainties linked to different scenarios. It would therefore be more appropriate to address this issue on the revision of NFRD."

The entity does not indicate support for civil liability

Question 19a: "From a practical point of view, as the legislative framework is likely to cover a large number of undertakings, it is difficult to see how national authorities, even the most staffed ones, may supervise, in an effective way, all companies subject to the due diligence requirements. As an alternative, we advocate for the possibility to designate an independent third party explicitly accredited for verifying due diligence information published by undertakings. This would be a coherent addition to the verification of non-financial statements, already required in some EU Members States and envisaged by the Commission in the context of the revision of NFRD. A rigorous process of accreditation of these independent third parties by one of the signatories of the European Accreditation Multilateral Agreement (EAMLA), could be put in place in order to guarantee the quality, legitimacy and credibility of such verification." Question 2: Please explain: ... "Extra-judicial remedies, proactive/voluntary solutions and grievance mechanisms can play an effective role and should be prioritised."

The entity does not support full value chain coverage but suggest limiting a mHRDD duty to the first tier of the supply chain.

Question 14: ENGIE is applying the French Law on the Duty of Vigilance adopted in 2017, agrees with and is committed to applying the core definition of due diligence according to OECD guidance and UNGP. The latter have a very broad scope, as far as the themes covered by due diligence are concerned and as far as the definition of a company’s “business relationship” is concerned. While this broad scope is appropriate for a soft law approach, it is much more problematic when it is transformed into hard law obligations coupled with civil liability. Considering the purpose of this consultation and its hard law perspective, we would like to emphasise two aspects of the proposed definition: • The supply chain cannot reasonably cover all suppliers and subcontractors as this would easily amount to hundreds of thousands of players to include. Mandatory due diligence should focus on the first tier of the supply chains (direct subcontractors or providers) where co-contractors are effectively able to exercise leverage through the contractual relationship. Regarding any further obligation down the supply chain, clarity should be given as to how companies should take measures to exercise leverage as it is practically impossible for undertakings to control every single part of the entire supply chain.

The position on a legal obligation to identify stakeholders is unclear.

Question 5: The company indicates it considers most of the listed interestes as 'Relevant' The exception being 'the likely consequences of any decision in the long term (beyond 3-5 years)' for which it states 'I do not know/I do not take position' The interests of society, please specify: In 2019, following the adoption of the Pacte Law, ENGIE indicated its intention to define its purpose with a view to its adoption in 2020 by its General Shareholders’ Meeting. The Board of Directors adopted the following wording: 'ENGIE’s purpose (“raison d’être”) is to act to accelerate the transition towards a carbon-neutral economy, through reduced energy consumption and more environmentally friendly solutions. The purpose brings together the company, its employees, its clients and its shareholders, and reconciles economic performance with a positive impact on people and the planet. ENGIE’s actions are assessed in their entirety and over time.' Question 6: "First of all, we would like to highlight that stakeholder consultation is a good practice. ENGIE has established different forms of stakeholder dialogue. Regarding the identification of company’s stakeholders, we are aware that we can only grow if we take into account the ecosystem in which we operate, and which is made up of many different stakeholders. This is why ENGIE identifies its key stakeholders and conduct dialogue with up to hundreds of them on a continuous or on an ad-hoc basis in order to compare their expectations with the company’s strategy (materiality analysis). There are as many ways of identifying stakeholder interests as there are companies (local vs. centralised identification, thematic vs. generic identification…). Regarding the management of the risks and opportunities in relation to stakeholders, we recall that the first mission of the Board is to determine the strategy of the company, considering the risks it is confronted with and the opportunities it has identified. Integrating and reporting on risks factors are key components of corporate stewardship and have already been included in EU legislation for a long time. In accordance with the Accounting directive, the management report shall include “a fair review of the development and the performance of the undertaking’s business and of its position, together with a description of the principal risks and uncertainties that it faces”. The NFRD has notably extended the scope of this risk assessment by requiring companies to publish a non-financial statement which is, in France, part of the management report and therefore falls under the responsibility of the Board of Directors. Consequently, we consider that the framework regarding the integration of sustainability risks, impacts and opportunities is already in place and efficient. This framework will certainly be strengthened following the review of NFRD and overlapping legislation should therefore be avoided."

The entity is opposing the introduction of a mandatory legislation of this issue.

Question 20a: "I disagree to some extent. Stakeholders’ engagement is not only a good practice but is key at corporate level in order to define a strategy in line with the expectations of the company’s stakeholders and also at operational level, to enable the appropriation of industrial projects by the territories. That is why a mandatory obligation should be excluded. At Engie, we have been grasping the issues of local acceptability since 2016 and have put in place a structured approach of dialogue with stakeholders. Three main principles can be identified from our approach:• The first principle is that all stakeholders impacted by the project should be consulted as soon as possible in order to make it evolve it and find compromises with the populations concerned. Above all, for a project to succeed, it must not be tied up in advance: it must be able to be adjusted according to the expectations of the stakeholders. • The second principle is that projects must be presented transparently to the public because any decision that is not clearly explained will generally not be understood. Transparency must necessarily be accompanied by a concern for pedagogy. It is a question of making citizens understand not only the technical dimensions of a project but also, and perhaps above all, how this project contributes to the public interest. Indeed, from a macro point of life, there may be a consensus on the public interest in carrying out a project, but from a micro point of view, an opposition can easily arise when it hinders private interests. You can understand the added value that a wind farm would bring to the entire population in terms of reducing CO2 emissions but if it is located near your home it's something else! That's why pedagogy is essential to the success of a project."

The entity appears to oppose new legislation. The statement indicates that it considers existing legislation to be sufficient.

Question 6: "First of all, we would like to highlight that stakeholder consultation is a good practice. ENGIE has established different forms of stakeholder dialogue. Regarding the identification of company’s stakeholders, we are aware that we can only grow if we take into account the ecosystem in which we operate, and which is made up of many different stakeholders. This is why ENGIE identifies its key stakeholders and conduct dialogue with up to hundreds of them on a continuous or on an ad-hoc basis in order to compare their expectations with the company’s strategy (materiality analysis). There are as many ways of identifying stakeholder interests as there are companies (local vs. centralised identification, thematic vs. generic identification…). Regarding the management of the risks and opportunities in relation to stakeholders, we recall that the first mission of the Board is to determine the strategy of the company, considering the risks it is confronted with and the opportunities it has identified. Integrating and reporting on risks factors are key components of corporate stewardship and have already been included in EU legislation for a long time. In accordance with the Accounting directive, the management report shall include “a fair review of the development and the performance of the undertaking’s business and of its position, together with a description of the principal risks and uncertainties that it faces”. The NFRD has notably extended the scope of this risk assessment by requiring companies to publish a non-financial statement which is, in France, part of the management report and therefore falls under the responsibility of the Board of Directors. Consequently, we consider that the framework regarding the integration of sustainability risks, impacts and opportunities is already in place and efficient. This framework will certainly be strengthened following the review of NFRD and overlapping legislation should therefore be avoided."