Bill would require more companies to publish sustainability information

Automatic summary, not yet reviewed

1. The bill would require large companies and large groups to include a sustainability report within their management report. A group would be considered large if it exceeds two of three thresholds: assets over €25,000,000, revenue over €50,000,000, or more than 250 employees.
2. Small and medium-sized companies that have issued securities on regulated markets would also be covered, except microenterprises. They could report a reduced version of the information, under simpler rules suited to their size.
3. The sustainability report would have to explain the company's impact on environmental, social, human rights and governance matters, and how these matters affect the company. The double materiality principle would apply and the whole value chain would be covered.
4. Sustainability information would have to be assured by an authorized verifier or verification firm. The Audit Act would be renamed Law on Auditing of Accounts and Verification of Sustainability Information.
5. Credit institutions and insurance and reinsurance companies would also be subject to these duties if they meet the size thresholds. Some financial products, such as alternative investment funds, would be excluded.
6. Spanish subsidiaries and branches of companies from countries outside the European Union would have to publish a sustainability report accompanied by an assurance report, when the group generates more than €150,000,000 in revenue in the EU.
7. Application would be phased in: first large public-interest entities with more than 500 employees (fiscal years starting January 1, 2024), then other large companies (from 2025) and listed SMEs (from 2026). Subsidiaries of third-country companies would start in 2028.
8. The bill coordinates this new reporting with the Climate Change Act: companies filing the sustainability report would be deemed to have met the climate risk duties in Article 32 of that law.

Who it affects

• Large companies and large groups: Would have to publish and get assurance for a sustainability report within the management report.
• SMEs listed on regulated markets: Covered from 2026, with a simplified version of the information; microenterprises are excluded.
• Banks and insurers: Subject to the same duties if they meet the size criteria.
• Spanish subsidiaries and branches of third-country companies: Would have to publish a group sustainability report with assurance, from 2028.
• Auditors and verifiers: New registration, training, independence and supervision requirements under the ICAC.

Words worth knowing

Informe de gestión (management report)

A document companies file with their annual accounts explaining how the business is doing and its risks.

Doble materialidad (double materiality)

Requires explaining both the company's impact on the environment and society, and how these matters affect the company itself.

Cadena de valor (value chain)

All the activities, resources and relationships the company uses to create its products or services, from start to end of life.

Entidad de interés público (public-interest entity)

Closely watched companies that affect many people, such as listed companies, banks and insurers.

Verificación limitada (limited assurance)

A lighter review of the report than a full audit; it is what would be required at first.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries