French companies’ ESG scores have been negatively impacted by the introduction of the Duty of Vigilance law in 2017, researchers have found.
Academics at the London School of Economics - Carsten Gerner-Beuerle, Suren Gomtsian and Edmund Schuster - assessed the ESG scores that LSEG and S&P Global provided for 141 companies listed in France between 2010 and 2023.
Their conclusion reads: “We find a statistically significant, but negative association between the adoption of the Vigilance Law and ESG scores that capture corporate behaviour associated with increased liability risk under the Vigilance Law.”
The authors suggest this could reflect more robust sustainability disclosures. Alternatively, they say it could reflect an increased focus on limiting legal exposures rather than “tailoring corporate ESG policies and disclosures to rating methodologies”.