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Corporate Social Responsibility

Perspectives for Sustainable Corporate Governance

Catherine Malecki

Corporate social responsibility (CSR) is setting new missions for companies and shining a welcome light on issues such as the behaviour of board members, shared value, the well-being of stakeholders, the protection of vulnerable individuals and the roles played by public opinion and shareholders. This timely book seeks to lay the foundations for a sustainable corporate governance based on the European Commission definition of CSR as ‘the responsibility of enterprises for their impacts on society’. More generally, this sustainable corporate governance responds to some of the pressing challenges of the 21st century, from sustainable finance and climate change to carbon reduction and population growth.
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Chapter 13: A special sanction: environmental liability in groups of companies

Perspectives for Sustainable Corporate Governance

Catherine Malecki

Extract

The need to provide compensation for environmental damage caused by a company’s activities means that a system for attributing environmental liability must be developed. The EU established the principle of environmental liability in its directive of 21 April 2004. However, this liability has had to be adapted for use in corporate transactions (in the specific case of groups of companies). In France, the Grenelle 2 Law (12 July 2010) has enshrined a new, highly regulated type of liability (parent companies’ liability towards their subsidiaries with regard to the remediation of sites or classified facilities that have been declared bankrupt) that involves establishing a specific instance of negligence that contributed to that subsidiary lacking sufficient assets. In the future, measures to determine compensation for environmental damage should include compensation for social risk, which itself is closely linked to issues surrounding climate change (for example, natural disasters that spark mass migration). The French law of 27 March 2017 on parent and contracting companies’ duty of care represents a significant step forward, even if certain difficulties remain.

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