French court rules on Scope 3 in corporate ‘vigilance plans’ 

TotalEnergies told to update its plan after judge sides with NGOs and the City of Paris in breakthrough ruling

A Paris court has ruled that TotalEnergies must update its sustainability plan to address its Scope 3 emissions. 

In a case brought by the City of Paris and a group of environmental NGOs, the judge concluded that large French companies must consider their Scope 3 emissions in order to comply with the country’s Duty of Vigilance Law. 

Total’s plan should cover the risks associated with its value-chain emissions, and the steps it will take to mitigate them, according to the ruling. 

The Duty of Vigilance Law was introduced in 2017, and mandates companies with more than 5,000 employees in France (or 10,000 globally) to publish an annual ‘vigilance’ plan, identifying serious human rights and environmental risks, and measures to tackle them. 

Thursday’s ruling affirms that the law covers climate risks and impacts arising from a company’s business activities, including the use of its products.

The court didn’t order Total to adopt any particular targets or actions, as requested by the claimants, saying the Law doesn’t “allow the judge to act in the company’s stead by requiring it to put in place specific and detailed measures”.

Total had been arguing that climate change was covered by disclosure rules, but not the Duty of Vigilance Law, and that it isn’t in control of its Scope 3 emissions.  

But the court found the law’s use of the term ‘environment’ should be seen to cover climate, and that global warming poses a “serious, present and future threat to the enjoyment of human rights”, meaning emissions were also relevant from that perspective. 

It pointed to a 2024 judgement by the UK Supreme Court, which concluded there was a “very strong causal link” between the extraction of oil, its consumption, and the release of GHG emissions. 

That leads to the conclusion that energy companies can reduce their Scope 3 emissions by not producing oil.

Ruling on Total, the Paris court said indirect emissions therefore “form part of the adverse impacts resulting from own activities”, and must be addressed under the Duty of Vigilance Law.

This renders Total’s current vigilance plan “incomplete” and it has six months to present an updated version to the judge, who will decide if its Scope 3 mitigation measures are sufficient. 

“TotalEnergies notes with satisfaction that today’s court decision did not uphold the claims made by the NGOs and the city of Paris seeking to bar Total ​from pursuing new oil and ​gas projects or compel it ⁠to reduce its production,” the firm said in a statement. 

Elsewhere this week, EU Member States agreed to push for new oil and gas projects to be allowed into investment funds dedicated to a sustainable transition. 

The anti-greenwashing regime for the bloc’s financial products, known as SFDR, is undergoing a major review. 

The European Commission has proposed that no fund that markets itself as supporting the transition can invest in companies developing new fossil fuel projects. 

However, Council approved its negotiating position on Wednesday, and it will seek to remove that ban and replace it with a less strict rule: companies will be deemed suitable for transition-labelled funds if they have a fifth of their capital expenditure aligned with the EU Taxonomy, and they have a plan to reduce their Scope 1 and 2 emissions. 

It is estimated that only a handful of companies will become eligible for inclusion in such funds if the changes are accepted, and one of them is TotalEnergies.