Spain introduces mandatory climate disclosures and transition plans

Government approves legislation as part of emergency package

Spain has introduced mandatory corporate carbon reporting with immediate effect, and will require companies to produce five-year decarbonisation plans.

A new national climate emergency plan, approved earlier this week, includes a requirement for large firms to report their Scope 1 and 2 emissions data for 2025, starting next year.

By 2028, the biggest ones must also include their Scope 3 figures.

In a move that suggests the law could fill in for the climate component of the postponed – and possibly heavily weakened – Corporate Sustainability Reporting Directive, the new law applies to companies already captured by Spain’s transposed version of the EU Non Financial Reporting Directive, meaning all those with more than 250 employees and either assets above €20m or turnover above €40m.

Government departments and some other public bodies will also be covered, bringing the total number of entities under in scope of the new rules to an estimated 4,000.

From 2026, businesses will also be required to publish strategies for reducing their greenhouse gas emissions over the coming five years. The plans must include a double materiality assessment for climate, along with measurable targets.

Spain has suffered a series of climate-related disasters over the past five years, costing it an estimated €32bn.

Last year, floods in the east of the country caused the deaths of more than 200 people.  More recently, wildfires swept through Southern Europe last month.

Spain’s former minister for the ecological transition, Teresa Ribera, is now the head of the clean, just and competitive transition for the European Commission, where she has pushed through the EU’s new Clean Industrial Strategy.

California update

California also provided a long-awaited update on its climate disclosure rules on Tuesday.

The state’s Air Resources Board released draft guidance on a law that will come into force next year, including a checklist to help companies prepare their reports, based on the Taskforce on Climate-related Financial Disclosures’ recommendations.

While the guidance doesn’t provide clarity on some of the more interpretive questions that companies have had about the rules, it does offer some further steer on questions it received from the market during the feedback period.