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Regulatory obligations, developments in climate negotiations, technological innovations and new employee expectations: CSR is redefining the rules of the game for companies. In this article, we decipher the leading topics of the moment, such as the impact of CSRD on SMEs, the mixed results of COP29, and advances in AI ethics.
"SMEs, don't wait to implement reporting!"
In an article for Les Echos, Antoine de Riedmatten, Chairman of the Executive Board of In Extenso, urges SMEs to get a head start on upcoming regulatory obligations in terms of non-financial reporting. Indeed, the CSRD will come into force in 2025 for large and listed companies: this will not be without affecting SMEs.
He claims that a "trickle-down effect" will impact the entire value chain, as the large companies affected by the reporting obligations will demand sustainability information from their smaller customers and suppliers.
In other words, SMEs with the best sustainability reporting tools and the most effective CSR information systems will gain a competitive advantage over their rivals on the one hand, and investors and banks on the other.
COP29: a low-cost final agreement?
Concluded in extremis in Baku, the final agreement of the 29th Conference of the Parties to the UN Framework Convention on Climate Change sets an amount of 300 billion dollars per year between now and 2035 from the countries of the North to the countries of the South to support their transition. The latter strongly criticized this amount as too low. The Indian delegate even criticized the sum as "pitifully low" and "derisory".
This criticism stems from the climate debt that the countries of the South accuse those of the North of having contracted with them in previous decades, and which they must now repay. In other words, the countries historically responsible for climate change are imposing a series of climatic risks on countries that then need exceptional means to protect themselves.
Finally, the figure of 300 billion only represents a budgetary effort of 7% "if we take into account global economic trends in terms of inflation and GDP per capita by 2035".
COP29: the mixed results of the negotiations
The two weeks of negotiations at COP29 resulted in a much-criticized financial agreement, but this should not overshadow the other events at the climate summit.
Firstly, the historic adoption of rules on a carbon credit market "open to countries and companies".
Secondly, the project to reduce carbon emissions, launched at COP27, does not seem to have made much headway. In particular, it has been held back by a coalition of countries, led by Saudi Arabia, which refused to include the COP28 assessment and the phrase "fossil fuel phase-out" in the agreements.
Finally, the evolution of human rights in the field of gender and gender identity has been held back by the most conservative states, such as the Gulf States and Russia.
Towards a renegotiation of European sustainability regulations?
CSRD, CSDDD and green taxonomy are in the crosshairs of the European Commission, which is considering so-called "omnibus" legislation to modify certain points. This regulatory triangle, which forms part of the European Green Deal and is supposed to guarantee a series of social and environmental rights, is under threat of being weakened.
The Commission justifies this move as a "simplification" measure aimed at reducing bureaucracy and "reporting burdens", said Ursula von der Leyen.
Criticized by lobbies, called into question by the Draghi report, denigrated by the French executive, European sustainability regulations are in serious danger of being watered down, which is bound to jeopardize the realization of the European economy's social and environmental ambitions.
Towards a common governance framework for sustainable European companies
In an article published in Le Monde, three CSR players - Olivier Favereau, Emery Jacquillat and Martin Richer - argue in favor of a common framework to respond to the need for simplification highlighted by the Draghi report and called for by European employers, while maintaining ambitious social and environmental objectives.
They propose the recognition of an EU-wide "company statute", which would combine the CSR achievements of the various member states:
- The mission company model (Latin Europe)
- The co-determination model of corporate governance (Germanic bloc)
- CSRD and the contributions of European works councils (Community law)
An international fund to combat climate misinformation
UNESCO, the Brazilian government and the United Nations are working together to set up a global fund to combat climate misinformation. With a target of $10-15 million over 36 months, the fund is to be administered by UNESCO, which will channel grants to NGOs.
Contributing countries will thus be able to finance investigations into the integrity of climate information, content and awareness-raising campaigns.
A welcome initiative against a backdrop of renewed climate scepticism, at least in France according to the latest barometer published by Ademe (a third of French people). But also, more globally, in the wake of the US election victory of a president who sees climate change as a "scam".
European summit on AI ethics
This year, the 7th SophI.A Summit, the European summit on artificial intelligence, is devoting part of its discussions to the question of ethics. Indeed, AI will undeniably become central to key sectors of the economy, as well as political life (such as justice). AI systems must therefore be designed and deployed with respect for "the fundamental principles of democratic societies".
Autonomous calculation and management of large quantities of data raises the question of the safeguards to be maintained around AI. In this context, we have identified 3 main priorities:
- Algorithmic biases and discrimination
- Transparency and explicability
- Autonomy and responsibility
The SophI.A Summit will present a series of initiatives and proposals to meet these challenges in a way that is applicable, and that still allows ethics to be seen as a driver of innovation.
Plastic Pollution Treaty: oil-producing countries block action
The United Nations International Negotiating Committee on Plastic Pollution is holding talks at its 5th session in Busan, South Korea. While the aim of the discussions is for the 170-plus participants to sign a binding treaty, some twenty states whose economies are highly dependent on oil production are blocking the process.
In fact, two positions seem to be emerging: those who want to control the entire plastic "life cycle", from production to recycling. States such as Saudi Arabia, Iran and Russia, on the other hand, advocate reducing pollution by improving the design, recycling and management of plastic waste.
In other words, a handful of countries are refusing to accept the prospect of a reduction in plastic production, which is considerably slowing down negotiations. The deadline for reaching an agreement is Sunday, December 1.
Fast fashion: a double threat to the climate and the economy
The NGO Friends of the Earth has published a report highlighting the threat posed by fast-fashion giants to the French textile economy. In addition to the already well-documented ecological damage caused by this mode of production, the NGO highlights two economic factors: job destruction and unfair competition.
The report states that "nearly 300,000 jobs" have been destroyed by the short-lived fashion industry, as a result of the massive relocation of the French textile industry since the 1990s. A real paradox, notes the NGO, given that "the quantity of clothing consumed has doubled" over the last 40 years.
Volumes sold by French retailers are tending to stagnate, while textile giants from Zara to Shein are posting sales increases of between 70% and 116%.
Climate quitting, a new reason for employees to resign
Climate resignation, sometimes announced with a bang online, is an employee's decision to leave his or her company because it is "not aligned with his or her environmental convictions".
The consulting firm Génie des lieux carried out a study in 2023 on these "conscious resignations", showing that 68% of French people questioned had already considered resigning because of a gap between their convictions and the company's values. More impressively, the study found that 34% had actually done so (without specifying a precise reason).
Thus, corporate social and environmental responsibility also appears to be an HR issue for retaining talent within teams. What's more, numerous studies have shown that fostering a working environment where employees are aligned with the company's values is a source of additional commitment.
The sources
Les Echos "Opinion | CSRD : SMEs, don't wait to implement reporting!"
Les Echos "COP29: an agreement that accentuates the division between North and South".
Novethic "COP29 review: the defeats that marred the summit".
Novethic "CSRD, CSDDD and green taxonomy: European sustainability regulations could be renegotiated"
Le Monde "A European framework for responsible companies committed to the ecological transition".
Youmatter "A new global fund to combat disinformation".
RSE Magazine "SophI.A Summit: Understanding the ethical challenges of tomorrow's AI"
Novethic "Plastic treaty: a handful of oil-producing countries block progress".
Sustainable news "Fast fashion, a vital threat to the French textile industry, according to an NGO".
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