Copublished with Les Amis de la Terre France
Paris, 4 July 2023 – A new investigation published today (Tuesday) by the Observatoire des multinationales shows how France is indulging the wishes of the finance industry to weaken the European CSDDD (Corporate sustainability due diligence directive). These revelations come a week before a key meeting in the “trilogues” negotiations between the Council of the EU, the European Parliament and the European Commission. The three institutions will discuss the inclusion of the financial sector. Friends of the Earth France and Reclaim Finance are calling on the French government not to be the voice of financial lobbies, and to take a stand by calling for the whole sector and all its activities to be included in the scope of the directive.
The investigation published by the Observatoire des multinationales shows that the French authorities are under the influence of financial lobbies, and of BlackRock in particular. While the European financial sector seemed divided on the CSDDD, the US investment fund got “tired of the procrastination of financial lobbies in Brussels” and “reportedly knocked on the doors of all Member States to obtain the exclusion of investors from the scope of the directive, until obtaining a favourable response from France”.
The Observatoire des multinationales points to a key lobbying weapon: revolving doors. Both BlackRock and the European lobby group Investment Company Institute (ICI) through which it operates, have recruited several people from French and European authorities. These include the former head of the Strategy and Sustainable Finance unit at the French Market Authority, and the former director in charge of regulatory strategy at the European Commission’s Directorate-General for Financial Services. These appointments give the American company privileged access to decision-makers.
According to the investigation, the French government is very open to the demands of the financial lobbies “because of the obsession shared at the highest level of government and in business circles: to take advantage of the Brexit to make Paris Europe’s leading financial centre and attract the American institutions that will gradually leave the City to set up in the EU”. Emmanuel Macron has held numerous meetings with the CEOs of BlackRock and JP Morgan. The later received the French Legion of Honor two days before the Council of the European Union voted on the CSDDD.
The Observatoire des multinationales has also denounced the “black box” of France’s decision-making processes, with their requests for access to documents having all gone unanswered.
These revelations undermine the arguments of the French government, which a few months ago tried to deny the retrograde positions it is defending in Brussels. Responding to questions from Friends of the Earth France and to an investigation by Mediapart, it stressed that it had “in no way asked to exempt banks from the application of the duty of vigilance” and denied any “request for specific treatment”. However, on 1 December last year, the Member States inserted exemptions for the financial sector following pressure from France, leaving its inclusion within the scope of the directive to the choice of each country, and limiting the financial services considered.
All of this comes as the legal action brought against BNP Paribas by Friends of the Earth France, Notre Affaire à Tous and Oxfam France, on the basis of the French duty of vigilance law, demonstrates the responsibilities of financial players in the development of fossil fuels, via a wide range of financial services that must be covered not only by the French law but also by the European directive.
While France publicly prides itself on being ambitious and a pioneer in the field of duty of vigilance, it does the exact opposite behind closed doors in Brussels. It is unacceptable that the French government continues to be the Trojan horse for the financial lobbies in the negotiations on this European directive. We call on French decision-makers to cut their toxic ties with the financial sector, and to put the protection of human rights, the environment and the climate before financial interests.
Juliette Renaud, Senior Campaigner on Corporate regulation at Friends of the Earth France
When it comes to due diligence, France is playing with words. According to the French position, financial players would be covered by the directive, but the financial services they provide would not. Therefore, the human and environmental impact of a loan to a transnational corporation would not be covered, but the impact of the production of credit cards or leaflets would. The European Parliament clearly identified the danger of such a situation, bringing financial services back within the scope of the directive. The French government must take note of this and stop defending a misleading inclusion of finance that has been emptied of all substance.
Olivier Guérin, European regulation Advocacy Officer at Reclaim Finance
