French law on CSR due diligence paradox: The institutionalization of soft law mechanisms through the law

Abstract

Purpose The purpose of this paper is to analyze the functioning of the French Law No 2017-399 relating to the duty of vigilance of parent companies and ordering companies, a law defended by labor unions and non-governmental organizations (NGOs) as an answer to the ineffectiveness of corporate social responsibility (CSR) mechanisms of multi-national corporation. Design\/methodology\/approach The authors try to determine to what extent the new mechanisms brought by this law could improve or not the failure of existing CSR mechanisms. Findings The authors find out that internal weaknesses of the law, which is based on voluntary CSR instruments and without penalties, internal mechanisms of the French judicial system or external economic factors, might considerably limit the effectiveness of the law. Originality\/value Even if for the first time, French judges might be asked to evaluate the reasonableness of the CSR practices of firms, one of the paradoxical effects of this law might be to institutionalize soft law mechanisms such as CSR certification or reporting, the proponents of this law precisely wanted to get rid of at the origin.