On October 29, the Spanish Government approved the Corporate Sustainability Reporting Law (LEIS in Spanish, Ley de Información Empresarial sobre Sostenibilidad), aiming to disclose companies’ contributions on environmental, social, and governance issues. This law transposes Directive (EU) 2022/2464, from the European Parliament and Council, concerning sustainability information reporting by companies (widely known as CSRD). The goal is to improve the framework for presenting and verifying information on environmental, social, and governance matters, as well as to streamline corporate information reporting obligations for businesses.

The law will gradually come into effect to facilitate companies’ adaptation to the new European regulations. It applies to all large companies and corporate groups, as well as listed small and medium-sized enterprises (SMEs), excluding microenterprises. Listed SMEs will benefit from certain accommodations: reduced mandatory information content, specific European standards for information presentation, and an extended preparation period for meeting new requirements.

The schedule of new obligations according to company type is as follows:

• – Large companies: When assets exceed €25 million and the annual net turnover exceeds €50 million.
• Two groups are distinguished:
  • – Starting January 1, 2024: Large public-interest companies and parent companies of public-interest groups, both with more than 500 employees.
  • – Starting January 1, 2025: The remaining large companies and parent companies of large groups.
• – Listed SMEs —except for microenterprises and SMEs listed on alternative and growth markets—, large captive insurance companies, and credit institutions defined as small and non-complex, from January 1, 2026.
• – Spanish subsidiaries and branches of third-country companies with a business volume within the EU exceeding €150 million must present this information starting January 1, 2028.

The law project marks progress in corporate transparency and social responsibility, establishing a consistent framework to understand how social and environmental factors impact businesses and how business activities affect society and the environment.

How can we assist you regarding the CSRD?

In line with the requirements of the new regulation, inèdit:

• Has expanded the calculation capacity of the èdit tool, enabling companies to autonomously calculate certain environmental sustainability indicators.
• Offers companies a double materiality assessment to activate their corporate sustainability strategy.
• Assists companies in identifying and completing the data points for the standards “ESRS E1 Climate change” and “ESRS E5 Resource use and circular economy.”

Information to be included in the sustainability report

The sustainability report must include information on the environmental impacts generated by the company, as well as information necessary to understand how environmental, social, human rights, and governance factors affect the company’s development, performance, and position. Furthermore, the law project establishes that the report must be prepared following a standardized reporting framework for all European companies and must be submitted in a unique electronic format to ensure comparability of corporate information across Europe.

Additionally, independent verification of sustainability reports, which is already required of Spanish companies under current law, will now be regulated in a similar manner to financial statement auditing.