During the last few weeks, the regulations related to the disclosure of information on sustainability have advanced towards their transposition into Spanish law, presenting several changes.
The Corporate Sustainability Reporting Directive (CSRD) sets out a new framework for the way companies report on their impact on the environment, society and governance, as well as how sustainability-related aspects can impact the company financially, both positively and negatively.
In this article, Energía Local would like to bring you up to date with the latest developments in reporting so that you, as a company, can keep abreast of the regulations that apply to sustainability reporting.
The CSRD and its importance
Before getting into the latest news on reporting, it is important to know the Directive in depth. This is a European Union (EU) initiative to improve the transparency and quality of non-financial information published by companies. The aim is to provide more detailed and standardized sustainability reporting , enabling stakeholders, such as suppliers, users, investors and investors, to make informed decisions.
It is important to note that the CSRD directive replaces the Non-Financial Reporting Directive (NFRD), increasing both the number of companies obliged to comply with it, within the European Union, and the data to be reported.
Progress on its transposition in Spain
One of the latest developments on reporting under the CSRD Directive, in relation to its transposition, has been the Draft Law on Corporate Information on Sustainability.
This bill, which was approved by the Council of Ministers and sent to the Spanish Parliament for urgent parliamentary processing, has already been published this week in the Official Gazette of the Spanish Parliament. With this, the Code of Commerce, the Capital Companies Act and the Accounts Auditing Act are modified.
However, what changes does it imply for companies?
In the first place, the thresholds of the size of companies to which it applies are increased. For this reason, the law will be applicable to:
Large companies with more than €25 million in assets and more than €50 million in annual net turnover:
- Fiscal year 2024: Large public interest companies and dominant entities of public interest groups, with more than 500 employees in both cases.
- Fiscal year 2025: Other large companies and dominant entities of large groups with more than 250 employees, which meet two of these requirements for two consecutive fiscal years.
Other companies
- Year 2026: Listed SMEs (with the exception of micro-enterprises and SMEs listed on alternative and growth markets); large captive insurers; and credit institutions defined as small and non-complex.
- Fiscal year 2028: Both Spanish subsidiaries and branches of third country companies with a turnover in the EU territory of more than €150 million.
On the other hand, the regulations also require a higher level of detail including aspects to be measured, in the governance, social and environmental areas. Some examples:
- A description of the group’s business model and strategy, indicating aspects such as opportunities arising from sustainability issues; transition plans in line with the Paris Agreement and the EU’s climate neutrality objective; how stakeholders are taken into account; the relationship of the strategy to sustainability issues; among others.
- Description of the due diligence process.
- The main actual or potential negative impacts related to the company’s or group’s own activities and its value chain.
Another major change with respect to the previous Non-Financial Reporting Directive (NFRD) is the use of the European Sustainability Reporting Standards (ESRS) to ensure uniformity and cohesion among the reports.
Finally, it is important to mention that these future Sustainability Reports must be verified by an external auditor. The role of the auditor must also comply with high standards of transparency, objectivity and impartiality. Possible auditors include those who have already audited the financial statements, or accredited independent auditors or verifiers.
Communication on the interpretation of regulatory provisions
Another of the latest developments in reporting has been the publication by the European Commission of a communication on the interpretation of regulatory provisions.
This communication brings together frequently asked questions related to Directives and Regulations on accounting, auditing, transparency and sustainability. For example, in relation to the interpretation of certain provisions of the first series of NEIS (information related to the value chain, taxonomy, digitization of the Report, etc.).
The purpose of this communication is to bring regulatory requirements closer to stakeholders, and to facilitate compliance.
Find out how the CSRD Directive affects your organisation
Answer the following questions to find out about the application of the CSRD Directive in your organisation, according to characteristics such as size or turnover, among others.
At Energía Local we accompany you
As a consultancy specializing in sustainability and energy, at Energía Local we focus on the sustainable management of companies.
Therefore, we guide and advise organizations on compliance with sustainable regulations and the reporting of their impacts in a clear and transparent manner. Our purpose is to accompany companies in their transition towards a more sustainable future, in which they can contribute value and positive impact on their environment.
In this line, the Local Energy team is at the disposal of companies to accompany them throughout their corporate reporting, integrating in the company all the necessary changes and turning the CSRD directive into a unique opportunity to make sustainability a competitive advantage.Contact us!
