Is extra-financial performance becoming a key factor in the decision-making process of French companies?

The increasing prominence of sustainability issues within companies is leading economic actors to strengthen their ESG positioning. The realities of climate and social challenges affect all economic sectors, compelling companies to rethink their business models and make plans to adapt to current ecological and social transitions.

Extra-financial performance, also known as non-financial performance, refers to the measurement and evaluation of a company's activities and impact beyond purely financial metrics. This includes environmental, social, and governance (ESG) factors, as well as corporate social responsibility (CSR) initiatives.

Assessing extra-financial performance has become increasingly important for investors, stakeholders, and consumers who seek to understand a company's broader impact beyond its financial returns. 

According to a report by France’s Ministry of Ecological Transition in June 2022, there has been a growing interest in CSR among French companies. According to ADN magazine, there are also rankings of French companies’ environmental social responsibility initiatives, with companies like Bio'vert, Doctolib, and Decathlon in the top five.

Companies with strong extra-financial performance are often seen as more sustainable, resilient, and attractive to investors who prioritise ESG criteria in their decision-making processes. Additionally, strong extra-financial performance can enhance a company's reputation, mitigate risks, and create long-term value for all stakeholders involved. 

The role of the statutory auditor in the non-financial performance of its clients may be significant, if in an indirect way, by improving the non-financial performance of its clients in several ways, particularly in supporting French financial management in the following areas:

• Verification of certain non-financial information, including ESG disclosures. By ensuring that information is accurate and reliable, the statutory auditor helps to enhance transparency and credibility in these areas, and raises awareness among companies about their impact on biodiversity destruction or gender equality balance.
  
  
• Recommendations and advice aimed at improving the company's ESG practices and policies. These insights can help the company identify improvement opportunities and develop strategies to enhance its non-financial performance.
  
  
• Stakeholder awareness. By emphasising the importance of non-financial performance and attesting to the reliability of the information provided by the company in this area, the statutory auditor can raise awareness among stakeholders and strengthen their commitment to sustainable development and social responsibility.

In summary, while the primary role of the statutory auditor is to ensure the integrity of financial information, the statutory auditor can influence the improved non-financial performance of clients by providing recommendations, advice, and assurance on the reliability of non-financial information.