Medef and Afep want to link climate and executive compensation

French employers want to do more for the climate.

For this, he wants to place social and environmental responsibility (CSR) "at the heart of the missions of the board" of directors, according to an updated version Tuesday of its code of governance for listed companies.

Published by the French Association of Private Companies (Afep) and the Movement of French Companies (Medef), this non-binding code of around fifty pages now includes a chapter devoted exclusively to the "Board of Directors and CSR". .

A code that emphasizes the climate issue

Directors are thus asked to define “multi-year strategic orientations in terms of CSR”, according to the new code reported by

.

Within listed companies, senior management is encouraged to propose to the board an “action plan” and “time frames” within which these actions will be carried out.

"The board examines the results obtained annually", further specifies the code, which insists in particular on the importance of the climate issue within CSR.

Another recommendation, this time affecting executive compensation: Afep and Medef encourage directors to define it by integrating “several criteria related to CSR, including at least one criterion related to the company's climate objectives”.

"The integration of CSR criteria in executive compensation is a powerful lever to bring these concerns to the fore", assure the two employers' organizations, even if this movement is in their eyes "widely engaged" in large companies.

All of the new recommendations are applicable “for general meetings ruling on financial years beginning on or after January 1, 2023”.

After several reports published between 1995 and 2002, the first “corporate governance code for listed companies” was created in 2003. The last update of the document dated from January 2020 and had recommended placing “the gender balance at the within the governing bodies at the heart of the concerns of the Board of Directors".

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