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Written by Florian Masseube - Article published in March 2023, updated in May 2026
In this article, you will discover:
- What the purpose of a company concretely means and how it differs from the corporate name
- What the PACTE law has changed in the obligations of companies towards society
- The strategic advantages of a well-formulated purpose: attractiveness, governance, employer brand
- The 5 steps to formalize a solid, coherent and sustainable purpose
- How to move from purpose to a structured and recognized CSR approach with the Positive Company® Label
What the PACTE law has changed for companies
For two centuries, the French civil code governing companies had not changed a line. Since 1804, companies were formed for one sole purpose: to share profits among partners. It is the PACTE law (Action plan for the growth and transformation of companies), enacted in May 2019, that changed everything.
By amending Article 1835 of the civil code, the PACTE law profoundly redefines the role of the company in society. From now on, a company must be managed in its social interest, taking into account the social and environmental stakes of its activity. It is no longer an option: it is enshrined in law.
This legislative change marks a historic transition. It paves the way for two new concepts in French corporate law: the purpose and the mission-driven company — two distinct but complementary tools for companies that wish to place their impact at the heart of their model.
What is a company's purpose?
The purpose refers to how a company intends to play a role in society beyond its economic activity. Unlike the corporate name (which is mandatory and purely legal), the purpose is optional. But what makes it powerful is precisely its ambition: it does not describe what the company does, it expresses why it exists.
Jean-Dominique Senard and Nicole Notat, in their report commissioned by the French government on the social purpose of companies, provide the most frequently cited definition:
“The purpose connects the past to the present; it is the DNA of the company. It has no economic significance, but rather pertains to vision and meaning.”
In practice, some large groups were among the first to seize it. Carrefour has included "food transition for all" in its statutes. Veolia has chosen to "contribute to human progress by resolutely aligning with the Sustainable Development Goals." At Positive Company®, our purpose is to "make positive economy a model for business growth."
Discover the Positive Company® Label Learn moreWhat distinguishes a true purpose from a mere slogan is its ability to genuinely guide the strategic decisions of the company, not just to adorn the homepage of the website.
Why formalize your purpose: the concrete benefits
According to a study by Ifop, 95% of French people say they expect companies to commit themselves to societal issues. The purpose is therefore not a stylistic exercise: it responds to a deep and lasting social expectation.
For the company, its benefits are both internal and external.
From a strategic standpoint, it places impact at the heart of governance and serves as an arbiter in decisions: an investment, a partnership, a recruitment is judged against the purpose. It becomes the reference point for all major directions.
From a human perspective, it anchors the company's project within the social body. Employees who understand and share the purpose of their organization are more engaged, more loyal, and more productive. In a talent war context, this is a direct competitive advantage.
From a commercial standpoint, it allows attracting customers and partners who share the same values, differentiating in saturated markets, and meeting the growing demands of public and private buyers who incorporate CSR criteria into their calls for tenders.
The 5 steps to formalize a solid purpose
Formalizing a purpose is not improvised. A poorly constructed purpose (too vague, too cautious, or disconnected from actual practices) can do more harm than good by fueling accusations of greenwashing. Here are the five steps that make a difference.
1. Identify the deep reasons for one's commitment
First of all, it is necessary to understand the why of the company. According to Errol Cohen, a lawyer at the Paris office and specialist in mission-driven companies, the purpose is “the backbone” of the company. Fabrice Bonnifet, president of the College of Sustainable Development Directors (C3D), poses the question this way: "What does the company bring to humanity? What would the world be missing if it did not exist?" It is from this reflection that an authentic purpose is born.
2. Find the right balance
An effective purpose avoids two symmetrical pitfalls: excessive ambition that sounds hollow, and excessive caution that says nothing. It must be, according to the words of Mélanie Czepik, CSR project manager at ORSE, "relevant, structuring, ambitious, and impactful". Neither a slogan nor an unattainable statement of intent.
“One must find the right balance between profit – which is important for a company – and wanting to save the widow and the orphan” - Jean-Baptiste Barfety, rapporteur of the Notat-Senard report
3. Build collectively
A purpose imposed by management without consulting the teams never takes root. Martin Richer, director of the Management and CSR firm, clearly reminds us: a CEO is there for an average of 5 to 6 years, while a good purpose can last 20 years. It is the entire team that must be involved in its development.
4. Make it a real strategic goal
The reason for being is not a communication tool: it is a decision-making tool. It must guide strategic trade-offs, influence HR policies, direct investments, and structure the relationship with stakeholders. If it does not change anything about how the company operates, it has no value.
5. Make it shine within its ecosystem
A well-formulated and genuinely lived reason for being deserves to be communicated — to customers, partners, investors, and candidates. For this, it must be understandable, memorable, and adopted by all stakeholders. This is the condition for it to become a true lever of differentiation.
💡 From the reason for being to a structured CSR approach: moving to the next step
Formalizing a reason for being is often the first step of a deeper transformation. But a reason for being without a structured CSR approach remains a statement of intent. For it to come to life, it must be backed by concrete, measurable, and recognized commitments.
This is precisely what the Label Positive Company®. Designed for companies that wish to go beyond statements and structure their CSR approach rigorously and independently, it is based on a framework aligned with ISO 26000, the SDGs, and the CSRD.
Le processus de labellisation The labeling process includes an assessment of the company's CSR practices, anonymous surveys of stakeholders (employees, customers, suppliers), and the co-construction of a CSR improvement plan. As a result, the company not only has credible external recognition but also a concrete roadmap to bring its reason for being to life over time.
Have you already formalized your purpose and wish to transform it into a structured and recognized CSR approach?
The PACTE law in brief
The PACTE law (Action Plan for Business Growth and Transformation) was enacted on May 22, 2019. It aims to remove obstacles to business growth at all stages of their development: from their creation to their transfer, including their financing.
On the CSR front, the PACTE law marks a historic turning point by modifying for the first time since 1804 two fundamental articles of the Civil Code:
- Article 1833 now requires all companies to take into account the social and environmental issues related to their activities.
- Article 1835 allows companies to include a purpose in their statutes.
The law also creates the status of mission-driven company, which goes further by imposing operational social and environmental objectives verified by an independent third-party organization.
FAQ - Purpose and CSR
The corporate name is the legal identity of the company — its official name as registered in the commercial register. The purpose, on the other hand, expresses the meaning and mission of the company beyond its economic activity. One is mandatory, the other is optional but strategically powerful.
No, it remains optional. The PACTE law does not require companies to have a purpose, but it provides them with a legal framework and requires them to consider social and environmental issues in their management. The purpose is a tool, not an obligation.
The purpose is a statement included in the bylaws, expressing the meaning of the company. The mission-driven company goes further: it includes specific social and environmental objectives in the bylaws and submits to independent oversight of their achievement. The two can coexist — a mission-driven company generally has a purpose.
A strong purpose meets four criteria: it is authentic — rooted in the history and real values of the company; structuring — it guides strategic decisions; ambitious — it goes beyond a simple description of the activity; and shared — it is understood and adopted by the teams and stakeholders.
Yes, and it is even the ideal profile. A company that has already formalized its purpose has generally already engaged in reflection on its values, commitments, and impact. The Positive Company® certification allows for structuring, measuring, and enhancing this approach with all stakeholders.