Takeaways

• Spain has made it mandatory for companies, public entities, and event organizers to report carbon emissions and create five-year decarbonization plans.
• The law transposes the EU’s Corporate Sustainability Reporting Directive (CSRD) into Spanish law, even as the EU considers easing requirements.
• Non-compliance could exclude organizations from public procurement, impacting around 4,000 entities.

Spain has introduced a sweeping new law that requires companies, public institutions, and event organizers to report their carbon emissions and prepare five-year decarbonization plans. The move comes as the country faces mounting climate challenges, including catastrophic floods and record wildfires that have caused an estimated €32 billion in damages over the past five years.

The decree, which came into force in June, incorporates the European Union’s Corporate Sustainability Reporting Directive (CSRD) into Spanish law. While the EU has recently proposed relaxing reporting rules to ease the compliance burden for businesses, Spain has pressed ahead with stricter national measures.

Read More: The Rise of Mandatory ESG Reporting Under CSRD: What Organizations Need to Know

Who Must Comply

According to sustainability consultants Plan A, around 4,000 organizations in Spain will now be required to submit emissions reports and carbon reduction plans. Private companies must comply if they meet at least one of the following thresholds:

• More than 250 employees
• Over €20 million in assets
• More than €40 million in annual turnover for two consecutive years

In addition, all public entities are covered regardless of size, along with organizers of events hosting more than 1,500 attendees. Companies that fail to comply risk exclusion from public procurement processes.

“This represents a substantial increase from previous voluntary frameworks, bringing thousands of organizations into mandatory compliance for the first time,” Plan A noted.

Wider European Context

The EU’s CSRD, in effect since July 2024, requires companies to disclose detailed information about their environmental and social impact, including greenhouse gas emissions. However, the European Commission recently launched a package aimed at simplifying reporting obligations, which would reduce the scope for up to 80% of firms.

Some regulators and experts fear that weakening these requirements could raise economic risks and slow investment in green projects. Spain’s decision to implement the directive in full, despite delays in transposition, reflects a stronger national commitment to climate accountability.

“Common measures across the EU would be preferable, but in light of the current situation, national measures at least provide some legal certainty to build from,” said David Ramos Muñoz, professor of commercial law at Madrid’s Carlos III University.

Also Read: SEC Drops Climate Rules as States and Global Powers Push Ahead

Political Push

Spanish Prime Minister Pedro Sánchez has framed the new law as part of broader efforts to confront the climate emergency. “If we don’t want to bequeath our children a Spain that’s grey from fire and flames, or a Spain that’s brown from floods, then we need a greener Spain,” he said earlier this month.

Spain’s climate-related losses underline the urgency. The country suffered destructive floods last year and endured record wildfires this summer, underlining the risks of inaction.

With this new mandate, Spain is positioning itself as a leader in corporate climate responsibility, even as debates continue across the EU on how far and fast to push sustainability reporting.

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Source: Green Central Banking