In Spain, there is currently an obligation for certain companies to prepare non-financial information statements, introduced by Law 11/2018 of 28 December.
At the end of 2022, a new European Union regulation was published, Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022.
This directive is part of the third pillar of the European project to combat climate change and aims to bring sustainability reporting into line with financial reporting. This is in response to the growing demand from stakeholders, particularly investors, for reliable and comparable sustainability information.
In terms of content:
- Sustainability reporting should provide the information necessary to understand the company’s impact on sustainability issues. It should also provide the information necessary to understand how sustainability issues affect the company’s development, performance and position.
- For this purpose, sustainability issues include environmental, social, human rights and governance factors, including any information related to human resources, anti-corruption and anti-bribery.
- Expanding on the information required by Law 11/2018, the Directive establishes that the report must include information on the business model, strategy, management bodies, policies, due diligence procedures, value chain, main risks and indicators. This information must be prospective and retrospective, taking into account short, medium and long-term horizons.
Sustainability information shall be part of the management report, in a clearly identifiable section, shall be available in electronic format, and access to this information shall be free of charge.
Verification of the sustainability report by accredited auditors or independent assurance service providers will be mandatory.
The Directive will enter into force on 1 January 2024. However, a transitional period is provided for.
- 1 January 2024 (2024 information to be reported in 2025) for companies already subject to the Non-Financial Disclosure Directive.
- 1 January 2025 (2025 information to be reported in 2026) for large companies not currently subject to the Non-Financial Disclosure Directive.
- 1 January 2026 (2026 information to be reported in 2027) for listed SMEs, small and non-complex credit institutions and captive insurance companies.
In the case of a consolidated sustainability report, subsidiaries will be exempted from reporting if certain conditions are met.
