The Council of Ministers approved, on May 3, 2023, in the first round, the text of the Draft Law that regulates the corporate information framework in environmental, social and governance matters.
The purpose of this scheme is to transpose the Community Directive 2022/2464, on December 14, 2022, into legal Spain, which seeks to improve the framework for the presentation and verification of information on sustainability and represents a revolution in the regulation of ESG. results
This regulation introduces new provisions of Law 11/2018, of December 18, which already provided for specific information obligations on environmental, social, human rights and governance issues. These companies are obliged to present information about the impact that the company generates on sustainable issues; on the way in which these issues affect the development, outcome and position of the company, and on business models and strategies, objectives, administrative bodies, policies, due diligence procedures, the value chain, the main risks and indicators, in relation to sustainability issues. .
This enables progress in terms of business transparency and corporate social responsibility, establishing an assessment in the framework of how social and environmental factors affect the activities of companies, contributing significantly to the achievement of the Sustainable Development Goals (SDGs).
companies are bound
This new preliminary draft will involve large companies that for two consecutive years, at the close of each day, meet at least two of the following circumstances: (a) that the total consolidated assets exceed twenty thousand in cash; b) that the amount of the net is linked to an annual turnover exceeding 40,000,000 coins; and (c) the average number of workers employed in the year is greater than 250.
Thus, the insurance and restitution entities are united within the scope of the application of Law XX/2015, of July 14, on the regulation, supervision and payment of insurance and restitution institutions. Also for credit institutions that are within the scope of the application of Law X/2014, of June 26, on the regulation, monitoring and resolution of credit institutions.
On their part, small and medium-sized enterprises (SMEs) that have issued securities, admitted to trading on the secondary market organized in the European Union, will also fall within the scope of application of the new legislative framework.
The regulation provides for the exclusion of the application for micro-enterprises, which at least two of the following characteristics: (i) that the whole business does not exceed 350,000 coins; (ii) that the net amount of the annual turnover does not exceed 700,000 coins; and that the average number of workers employed in the year does not exceed ten.
Obliged SMEs will have a series of facilities, such as reduced content, special rules for presenting said information, and additional time to prepare for this new requirement, establishing the beginning of the obligation in the financial years. on January 1, 2016.
Digitization of data
Consequently, to advance to the digitization of data and to compare the data that is presented, companies must prepare and present a set of financial and sustainable information, which will be included as a specific section in the management of reports – according to each. in electronic form.
The sustainability information will be submitted for verification, either by an auditor of the accounts (which may be the same as the accounts audit or a different one), or by an independent verification service provider.
The public control of the activity will be established by the Institute of Accounting and Auditing (ICAC), which will prepare technical standards for the verification of information on sustainability, ethical standards and quality of internal control standards for verifiers and verification companies, according to equivalents for those established for. performance of auditing systems to ensure consistency and quality verification.
Finally, the Draft Law seeks to promote greater transparency in organizations, seeking to align over time the publication of sustainability information with financial information by providing access to verified sustainability data, which are available in a unique electronic format in Europe. .