In the context of the COP 21, the French Parliament adopted, on July 22, 2015, the Energy Transition Bill (the "Bill"), which is currently being reviewed by the French Constitutional Court prior to its publication in the Official Gazette. In essence, the Bill provides for a national low-carbon strategy, as an implementation of the decision 1/COP 16 (Cancun 2010) and of the European Regulation (525/2013) "on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change."

The strategy, as defined by Article 48 of the Energy Transition Bill, will allocate carbon budgets (i.e., greenhouse gas emission thresholds) between key sectors and will provide sectoral and national guidelines to meet the defined targets. This strategy will cover, in particular, sectors that are not included in the European Union's Emission Trading System. The implementing decrees will define both carbon budgets and a roadmap. The roadmap will take into account French international and European undertakings as well as the competitiveness issues in sectors facing international competition. In addition, governments will have to assess the potential social, economical, and environmental impacts of these new tools.

The Bill will add new reporting obligations for institutional investors. To date, institutional investors are required to indicate in their annual report how their investment policies include social and environmental dimensions. Pursuant to the Bill, institutional investors will have to demonstrate how these policies contribute to energy transition and to mention their efforts to meet the objectives of limiting global warming. If their contribution is below the "indicative targets"—determined in keeping with the low-carbon strategy—institutional investors will have to justify in their annual report the reasons for their insufficient contribution. Moreover, institutional investors will have to provide data on their exposure to climate risks.

Finally, the Bill will extend the reporting obligations applicable to certain types of companies. Public companies will have to provide in their annual report a list of measures implemented to mitigate the climate-change-related financial risks and to respect the national low-carbon strategy. Similarly, all limited liability companies whose turnover will exceed the threshold (fixed by decree) will have to include in their business report the impact on climate change resulting from the use of the services and goods they provide, along with the existing obligations to assess the social and environmental impacts of their activities. These new obligations will apply not only to limited liability parent companies but also to their subsidiaries and controlled companies.

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