Decree No. 2022-982: As of July 1, companies must step on the scale and… start losing weight!
Since early July 2022, new regulatory requirements regarding reporting, defining, and demonstrating companies’ low-carbon trajectories have been imposed by a new decree that took effect immediately.
These new carbon footprint reporting requirements significantly expand the scope of emissionsthat must be taken into account when preparing the mandatory GHG emissions inventory for businesses and local governments. From now on, these reports must include indirect Scope 3 emissions (by far the most significant): those resulting from the legal entity’s operations and activities, as well as, where applicable, those related to the use of the goods and services it produces. These emissions must be identified and quantified in accordance with the methodology specified in Article R. 229-49.
Reminder: Until now, only Scopes 1 and 2 were required when preparing a GHG inventory (also known as a“carbon footprint”®).
The low-carbon transition plan is finally becoming rigorous: attached to the financial statements, in accordance with Article L. 229-25, it describes the actions implemented in the years following the previous financial statements, as well as the results achieved. It sets out separately, for direct and indirect emissions, the actions and measures that the legal entity plans to implement in the years leading up to the preparation of its next report. It specifies the total volume of greenhouse gas emission reductions expected for both direct and indirect emissions.
Of course, for private-law legal entities not subject to the obligations set forth in Article L. 225-102-1 of the Commercial Code (large companies and local governments), the indirect emissions that must be taken into account are still limited to those associated with the consumption of electricity, heat, or steam necessary for the legal entity’s operations.
- However, the requirement that large companies and local governments reduce their emissions by including Scope 3 will, in turn, compel them to impose this specific Scope 3 requirement—which is critical to their emissions reduction action plans—on all their subcontractors and suppliers.
- Ultimately, then, there is good reason for all companies, regardless of size, to begin taking concrete steps immediately to measure, reduce, and accurately report their GHG emissions in order to meet their customers’ new requirement : “carbon competitiveness.”
Beyond this regulatory aspect, this reporting initiative is also essential from the perspective (over the next 2 to 3 years) of preparing companies for the implementation of a“carbon tax base” (reflecting the expansion of carbon allowances and the introduction of a future carbon tax on imports, as decided in recent months) for all companies.
- This is the figure on which all taxes and quota overages will be calculated.
- Only a reduction in companies' GHG emissions can offset the cost of this new tax.
- The “carbon competitiveness” of companies is the new paradigm for their economic performance and sustainability.