France's Loi de Vigilance underpins EU shift to CSDDD and CSRD

France's 2017 Loi de Vigilance has become the blueprint for the EU's Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive, now being transposed across member states in 2026. The expanded scope captures non-EU firms in the internal market, raising compliance obligations for Indian exporters and suppliers in European value chains.

France's Loi de Vigilance, enacted in 2017, pioneered mandatory human rights and environmental due diligence and became the foundational blueprint for the EU's Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD). The transition, underway in 2026, marks a shift from voluntary corporate social responsibility to mandatory accountability. While Loi de Vigilance targeted only the largest French companies, the CSDDD adopts its model of identifying, preventing and mitigating adverse impacts but adds prescriptive requirements and significant penalties for non-compliance, with audit-ready CSRD disclosure.

The interconnected regulations apply far more widely than the original French statute, encompassing thousands of European and non-European firms operating within the EU internal market. The CSDDD requires companies to take responsibility for the actions of their subsidiaries and business partners across upstream and downstream value chains. Indian exporters, manufacturers and suppliers integrated into European supply chains are directly affected, as their EU counterparties will demand due-diligence cooperation, traceability and transparent data on human rights and environmental performance to maintain market access and avoid penalty exposure.

Affected companies should monitor the transposition of CSDDD into national law across EU member states, with reporting effective dates already impacting large enterprises in 2026. Firms must move beyond simple compliance toward robust sustainability risk-management systems aligned with CSRD disclosure standards. Indian suppliers should prepare to provide audit-ready due-diligence data to European clients, map human-rights and environmental risks across their operations, and integrate value-chain accountability, since robust due diligence is becoming a prerequisite for market access, capital allocation and long-term legal resilience in the EU.

Key figure — Foundational law: French Loi de Vigilance enacted in 2017