BEGES vs. CSRD

Introduction & Regulatory Developments Regarding the Transition Plan

Regulatory developments related to climate issues are sharp increase: They target a broader range of companies and are becoming increasingly ambitious. As a result, the requirements are particularly evident in the area of transition plan, one of the essential tools for guide the effective implementation of decarbonization within companies.

The emergence of several standards and regulations—such as BEGES^[1], the UK TPT^[2], the ISSB^[3], the CSRD^[4] and the CSDDD^[5] —, each with different expectations, can cause some confusion among companies. Although these regulations share a common goal, namely transparency in impact reporting, with the aim of guiding economic actors toward reducing greenhouse gas emissions, Their approaches vary in terms of form and content, since they are issued by different bodies and cover distinct areas.

In France, BEGES has long provided a head start to environmental regulations. However, the European Commission has taken a giant leap forward with the implementing regulation for the CSRD, redefining climate reporting requirements and also taking into account other environmental issues as well as social dimensions.

In previous articles by Carbone 4, we have already examined the The CSRD Context, Its Definition, and Its Requirements, as well as the Target companies and deadlines of this directive. This article builds on that discussion by analyzing the climate transition plan^[6] of the CSRD and by comparing it to that of the BEGES, with the aim of clarify these regulations and their interoperability for businesses.The goal is to demonstrate that these regulations, far from being mere constraints, can be turned into assets for developing an ambitious and effective climate strategy.

Background and Characteristics of the Regulations

What is a transition plan?

A transition plan is a document that describes all of the actions and measures to be implemented to reduce greenhouse gas emissions generated by an organization's activities^[7]. Its goal is to show how the organization will adapt its strategy and business model to make them compatible with a low-carbon future, in accordance with the objectives of the Paris Agreement.

The BEGES transition plan is based on Article 75 of Law No. 2010-788 of July 12, 2010 (“Grenelle II Act”), which requires the development and publication of such a plan. Since January 5, 2023, the CSRD took effect. Its ESRS E1 standard, which addresses climate change, requires a greater transparency regarding companies' transition plans, with a particular focus on their decarbonization pathways. It will take effect starting in 2025 for the companies involved, and its scope is broader than that of the BEGES.

What changes will the CSRD bring to the publication of the transition plan?

1. The Transition Plan: At the Heart of the Corporate Strategy

The main difference between the BEGES transition plan and the CSRD lies in the the central role of the plan within the company's strategy. The BEGES plan takes an operational approach by identifying the key stakeholders in governance, setting emission reduction targets for various time horizons, and implementing a concrete action plan for decarbonization, accompanied by monitoring of results.

The CSRD's transition plan incorporates these elements but goes even further: it places the The green transition at the heart of the company's business model. Thus, it requires the development of an integrated climate strategy that involves all of the company’s departments and outlines how the company plans to adapt to a low-carbon world. This ensures the alignment between the climate strategy and the company's overall strategy, in particular by requiring the specification of the Investment and Financing Plan for Action Strategies, in order to ensure their feasibility and alignment with the company's long-term objectives.

More specifically, the CSRD requires companies to describe material issues in their operations and value chain, as well as current and future impacts, risks, and opportunities related to their business model, strategy, and decision-making processes. It also requires companies to present strategic actions to manage these issues and to assess the resilience of their strategy in the face of material risks. In addition, the CSRD requires an assessment of the expected quantified financial effects of these risks and opportunities—that is, an analysis of the potential impact on the future value of balance sheet assets and liabilities, as well as on the company’s future income statement.

2. Dual Materiality

Another major advantage of the CSRD lies in its approach to double materiality. While the BEGES transition plan focuses primarily on mitigation—that is, reducing the company’s climate impact through decarbonization—the CSRD requires companies to conduct a double materiality analysis. This analysis makes it possible to assess the company’s impacts in relation to planetary boundaries (climate, biodiversity, water, etc.) and social issues, while measuring and “monetizing” the effects of ecological disruptions on the company’s economic sustainability.

As such, the CSRD provides companies with a better understanding of their risks and opportunities in the face of material environmental and social challenges—which extend far beyond climate alone—and enables them to better prepare for these issues. The transition plan then ceases to be merely an operational decarbonization plan and becomes a much more powerful strategic tool, helping the company adapt to these challenges and thereby strengthening its long-term resilience.

3. Level of Ambition of the Objectives

BEGES recommends aligning the decarbonization trajectory with the Objectives of the SNBC (National Low-Carbon Strategy), taking into account the specific context in France. However, The CSRD does not require the publication of a transition plan specifically aligned with the 1.5°C target. However, it requires companies to specify—if a climate transition plan has been adopted—to what extent their GHG emissions reduction target is consistent with that plan. Consequently, in terms of requirements, BEGES seems to be a better fit, thanks in particular to its local sector-based approach, to help businesses adapt to a low-carbon world.

However, the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D), which will take effect in 2026, will require companies to develop transition plans consistent with a 1.5°C scenario. These regulations will apply to large limited-liability companies in the European Union with more than 1,000 employees and net revenue exceeding 450 million euros, as well as large non-European companies with net revenue exceeding 450 million euros within the European Union.

4. Mandatory Nature of the Transition Plan

A A major difference is emerging between BEGES and CSRD with regard to their mandatory nature of its provisions. For BEGES, the publication of the transition plan is a strict requirement, although this requirement is not always met. As pointed out by the AEF info articleIn October 2024, the Association Actionnaires pour le climat identified 45 companies in the SBF 120 that had neither published their carbon footprint nor submitted a transition plan under the BEGES framework, and 26 companies that had disclosed only partial information. This means that nearly 60% of the companies in question are not in compliance.

The CSRD does not require this disclosure; rather, it aims to promote transparency regarding sustainability information. It therefore requires that the transition plan be disclosed only if the company has one. If not, the company must simply state that it does not have one. However, the application of the CSDDDwill transform the situation on a European scale. This regulation will require large companies to implement transition plans.

5. Locked episodes and other additions

Another innovative concept introduced by the CSRD is the Calculation of "locked-in" emissions related to the assets the company uses and the products it sells, throughout their useful lives. This calculation makes it possible to identify the “stranded assets”, that is, the company’s key assets—whether already in operation or planned for the next five years—that result in significant GHG emissions. The objective of this exercise is to assess the alignment between the company’s decarbonization goals and emissions locked in for many years, while identifying the company’s assets and activities that are exposed to transition risks.

The CSRD also calls for the integration of information from the EU Taxonomy, in order to detail the proportion of revenue that meets the criteria, its growth potential, as well as the capital expenditures (CapEx) and operating expenses (OpEx) required to achieve these objectives. It also includes expenditures related to activities that are not eligible under the Taxonomy but that contribute to the company’s decarbonization and adaptation efforts.

6. Frequency of the report's publication

Another key benefit of the CSRD is the increased frequency of reporting. Currently, companies are required to update their BEGES every four years, a pace that, in the Given the urgent need for ecological transition, this is no longer sufficient. With the CSRD: These updates will become annual, thereby enabling continuous monitoring of the progress of companies' transitions and facilitating the necessary adjustments along the way.

7. Publication Method

Regarding the method of publishing the BEGES transition plan, No major changes are planned, unless new guidelines are issued by ADEME. Currently, companies subject to the BEGES can include their transition plan in their Non-Financial Performance Statement (DPEF) with a link to the website, or publish it directly on ADEME’s Bilan GES platform. With the entry into force of the CSRD, companies required to develop a transition plan under the BEGES but not subject to the CSRD will continue to publish their plan in the same manner. Those subject to the CSRD will have the option to add a link to their transition plan on the Bilan GES website.

8. Insurance Requirement

Another major change introduced by the CSRD compared to the BEGES is the assurance requirement—that is, the review of information related to the company’s transition plan to ensure its accuracy and reliability.

Unlike the BEGES, which does not require an external review, the CSRD requires limited insurance from the outset, with a goal ofa gradual increase toward a reasonable level of insurance by 2028. The main difference between limited and reasonable insurance lies in the level of assurance and scope of the procedures : Limited assurance is based on analytical reviews and less in-depth investigations, while reasonable assurance involves detailed testing and a review of internal controls.

This requirement for assurance under the CSRD enhances the credibility and reliability of the information in transition plans and marks a significant progress in terms of transparency and rigor in sustainability reporting within the European Union.

Conclusion

In recent years, many companies have set emissions reduction targets but have often failed to develop and publish transition plans. Yet these plans are essential for achieving and tracking the set goals. That is why regulations are becoming increasingly stringent regarding the development of comprehensive and detailed transition plans, to ensure that these commitments do not remain mere declarations of intent and that companies take action to fulfill them.

This article examined the CSRD and the BEGES, highlighting one of the major changes introduced by the CSRD: the integration of transition plans into the corporate strategy, supported by funding plans to make it a reality. This requirement calls for collaboration and coordination at all levels of the organization to prevent the development of a parallel climate strategy that could be incompatible with the company's overall objectives.

Another key strength of the CSRD lies in its approach to dual materiality. The transition plan is no longer limited to being a mere tool for operational decarbonization, but is becoming a a true driver of transformation, incorporating both the mitigation of environmental impacts and adaptation to social and environmental challenges.

But then, what does the future hold for the BEGES transition plan with the introduction of the CSRD? The BEGES transition plan remains relevant and complementary to the CSRD until the latter becomes mandatory. The CSRD, as a transparency exercise, does not require companies to develop a transition plan; it only requires the publication of such a plan if one has been implemented. In contrast, the BEGES mandates the development of such a plan. This requirement should promote greater transparency in transition plans in France as soon as the CSRD takes effect.

Unlike in other countries where companies were not required to implement such plans, companies subject to the BEGES must already have a transition plan in place, provided they have complied with this requirement. This plan can then be used to meet the CSRD’s requirements, with the CSRD’s additional requirements incorporated into it. However, the impact of this increased transparency remains limited by a high rate of non-compliance in the publication of BEGES plans.

We are operating in an environment where regulations governing transition plans are gradually becoming more stringent. In the future, the implementation of these plans will become more sophisticated, and they will need to be increasingly robust, formalized, and aligned with companies' overall strategy, while also becoming mandatory, including for small organizations.

It is therefore crucial that companies prioritize the development of ambitious, robust, and high-quality transition plans. By meeting regulatory requirements, they will not only be in compliance, but also better prepared to address social and environmental challenges, including climate change, which remains, ultimately, the fundamental objective of all these regulatory initiatives.