On November 15, 2024, the Spanish Parliament presented the Transposition Law on Corporate Information on Sustainability, which marks the transposition of the CSRD in Spain.
Don't worry, because we have taken care of reading it for you. In this post we summarize everything you need to know.
Large companies, listed SMEs and subsidiaries of foreign companies with significant operations in the EU are required to report. The latter are those with net revenues of more than €150M in the EU for two consecutive financial years or a subsidiary or branch generating more than €40M in the region.
The reports should include the business model, sustainability objectives, risks, environmental and social impacts and the value chain. All of these should be integrated into the management report.
It regulates how to incorporate the sustainability report in the annual accounts. It also defines the role of verifiers, who will ensure that the information complies with the standards.
Finally, the Account Auditing Law details the technical and ethical requirements (for example, the independence of the auditor).
All this will be supervised by the ICAC (Instituto de Contabilidad y Auditoría de Cuentas), in order to maintain quality control.
Implementation will be gradual and will depend on the size -and type- of entity:
In the first years, while full standards are being developed, companies will be able to perform limited verification. Once the final standards are adopted, the processes will be more rigorous.
During this period, failure to collect all the necessary information will not be a problem. It will only be necessary to justify this failure by explaining the efforts that have been made to have this data and informing about the future plan to improve the collection.
The law will come into effect the day after its publication in the Official State Gazette (BOE). This marks the beginning of the transition towards compliance with the new sustainability framework. Implementation will follow the same gradual schedule as the transitional period.
Additional provisions are the sections within a law or regulation that include clarifications or specifications. We explain you the three that are included in the transposition.
They are obliged to report information on sustainability that applies to large companies. However, certain exceptions are also introduced:
Both of these cases must comply with sustainability obligations:
It will be the central focus of the reports. It requires companies to assess their environmental impact on the planet and the impact of the planet for their company.
If you want to learn more about dual materiality you can read more here.
We don't want to sell fear, but beware of not complying. There are three types of sanctions. Let's go:
Exclusion from public contracts and loss of access to subsidies or tax benefits.
May fall on the company's managers or those personally responsible for the company. Consequences include individual fines and disqualification from holding management positions for up to 5 years in the most serious cases.
The ICAC will be in charge of supervising compliance, and the sanctions will be public.
If errors are detected in the reports, companies must correct them within the first six months. Ignoring this may increase penalties and bring more serious legal problems.
👉 Request a summary document on the transposition of the law.
