Newsletter CCSF 2024 n°5

Essity to invest in new R&D center in France

The new R&D center is strategically located in proximity to Essity's current facility, to ensure the retention of their over 80 experts and engineers. The investment is part of a wider plan to create a larger, more efficient center equipped to address future challenges.

Despite the advancement of digitization and the availability of AI tools, French payroll remains a challenge for international companies operating in France. The complexity of French labor law significantly impacts payroll management. Internago is a Swedish firm with a strong European presence. In France, Internago are a team of French payroll experts with experience from leading global firms such as Accenture, EY, and PwC. Their aim is to provide a comprehensive payroll service, which includes an online portal for managing payroll the payroll flow, time, absences, and expenses. They extend a warm invitation to all members of CCSF to engage in dialogue with them regarding how they can support your payroll needs. Whether you require a complete outsourcing service, a SaaS provider, or additional expertise to complement your existing payroll team, Internago is here to assist you.

Read more here: Mastering French Payroll: Partnering with Internago for Outsourcing Success.

On the week of 22-26 April, the European Parliament concluded its final plenary session before its dissolution in preparation for the upcoming EU election on 6-9 June. In a voting marathon, members formally adopted several pieces of legislation finalized in recent months, with corporate governance being a key topic on the plenary's agenda as the Parliament formally adopted two initiatives aimed at strengthening businesses' supply chain governance. Members of the Parliament approved the contentious Corporate Sustainability Due Diligence Directive (CS3D). This directive aims to bolster human rights and environmental protection by mandating that companies perform due diligence across their global supply chains and address any adverse impacts. It introduces new obligations for European businesses to thoroughly audit both their upstream partners involved in manufacturing or design and their downstream partners responsible for transportation, distribution, or storage of products. Companies are also required to create plans for transitioning to a low-carbon economy. Non-compliance can result in fines of up to 5% of global turnover. These rules will take effect for companies with more than 5,000 employees and a global turnover exceeding €1,500 million in 2027, firms with over 3,000 employees and a €900 million turnover in 2028, and businesses with more than 1,000 employees and a global turnover above €450 million in 2029.

In parallel, the European advisory group responsible for developing the EU's corporate sustainability reporting standards, along with its international counterpart, endorsed an interoperability map between the two sets of standards. Businesses had feared excessive burdens if they needed to comply with both the EU's and international standards for global recognition. The interoperability map is designed to help companies ensure that reporting under either standard is recognized by the other, thereby avoiding unnecessary double reporting. However, due to the EU's stricter requirements, compliance with international standards does not equate to compliance with EU standards. Additionally, members adopted new rules to prohibit products made with forced labour from entering EU markets, reinforcing the EU's commitment to eradicating modern slavery. These rules do not impose additional due diligence requirements but empower Member States and the Commission to investigate suspicions of forced labor, impose fines, and intercept such products. EU states can notably remove products made with forced labour. The Commission is also granted the authority to investigate supply chains outside the EU, seize products at the border, and remove them from the market. Moreover, importers of high-risk goods will need to provide detailed information about the manufacturers.

Next steps

Both legislation will now need to be formally endorsed by the Council of the EU before publication to the Official Journal and entry into force.

The Parliament has adopted two significant initiatives to advance energy and green transitions within the Union. On April 25, members endorsed the Net-Zero Industry Act, aiming to bolster the EU's capacity to manufacture net-zero technologies. This initiative, in response to the US Inflation Reduction Act, seeks to stimulate investments in the EU for producing key net-zero technologies, thereby accelerating their deployment and securing EU supply chains.

The act sets a target to produce 40% of domestic needs for net-zero technologies within Europe and to account for 15% of global production by 2040. It encompasses 19 different technologies, including solar panels, wind turbines, carbon capture and storage, nuclear energy technologies, biotechnologies, and electricity grid technologies. Key provisions include establishing deadlines for permitting procedures for new green technology manufacturing sites, facilitating funding from Member States, and rules for encouraging investments. Furthermore, the law mandates that public authorities use a 'qualitative' criteria based on sustainability and resilience when purchasing technologies, to give European manufacturers a competitive edge over foreign producers. On April 24, the Parliament also adopted revised rules to improve air quality across the Union. These rules impose stricter limits on air pollutants, aiming to curb activities that contribute to air pollution. The updated regulations set more stringent limits and target values for pollutants harmful to human health by 2030. However, member states can postpone these deadlines by up to ten years under specific conditions. Additionally, the new law allows individuals affected by pollution to take legal action if the rules are violated and to seek compensation for health damages.

Next steps

The Council of the EU is expected to formally endorse the NZIA and the new law on air pollution before publication to the Official Journal of the EU and entry into force

On April 23, the Parliament adopted a new "right to repair" Regulation designed to make repairs easier and more attractive to consumers while imposing repair obligations on producers. The Regulation are expected to strengthen the repair market in the EU by ensuring that manufacturers provide timely and cost-effective repair services for product solves. They are also expected to help consumers by making sure that they are informed about their repair rights, repair conditions and available repair services. On the same day, the Parliament also adopted a revised product eco-design framework aimed at enhancing the durability, reusability, upgradeability, repairability, and recyclability of products within the EU. The European Commission will outline specific product requirements through secondary legislation, prioritizing certain product groups in its first working plan, including iron, steel, aluminum, textiles, furniture, tires, detergents, paints, lubricants, and chemicals. The law will also introduce digital product passports with information for consumers. In addition, it will ban the destruction of unsold consumer products. Moreover, on April 24, members adopted new rules on packaging and packaging waste, targeting a reduction in overall packaging and promoting sustainability. The rules set packaging reduction targets of 5% by 2030, 10% by 2035, and 15% by 2040. The new framework also mandates countries to reduce plastic packaging waste and bans certain types of plastic packaging from 2030. Furthermore, it introduces reuse targets for 2030 to encourage reuse and refilling by consumers and establishes recyclability and recycling content targets.

Next steps

The new circular economy rules need to be formally adopted by the Council before publication to the Official Journal of the EU and entry into force.

Commission President Ursula von der Leyen faced her rival leading candidates in the first debate of the EU elections campaign. Throughout discussions on various policy issues, from climate change to security and defense, the incumbent president effectively defended her Commission’s track record, solidifying her position as the frontrunner to lead the next Commission.

In contrast, her main competitor, socialist Nicolas Schmit, failed to make a significant impact on stage. The liberal candidate, Marie-Agnes Strack-Zimmermann, struggled with conveying her ideas in English. Similarly to von der Leyen, the Green candidate Bas Eickhout also had a strong performance. However, given the student audience and recent polling, his success might be somewhat misleading. Lastly, the far-right candidate Anders Vistisen, although an easy target for criticism from other candidates, may have reinforced his group’s appeal to their voter base as an alternative to the establishment.

Next steps

The European elections will take place on 6-9 June. Once the new European Parliament is formed, a new European Commission will take office.