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Legal Obligations of Companies in Spain: Sustainability and Environmental Protection

Legal Obligations of Companies in Spain: Sustainability and Environmental Protection
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In Spain, companies are required to comply with various sustainability and environmental protection regulations which derive from both national and EU legislation. These regulations seek to reduce the environmental impact of companies and encourage sustainable practices in their operations.

Abigail Sked-circulo-1Written by Abigail Sked

 Paralegal 

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National Regulations

Law on Environmental Responsibility

Those involved in certain activities that are considered to pose a high risk to the environment, such as waste management, the chemical industry or mining, must have at their disposal financial guarantees to enable them to meet the environmental liability which is inherent to the activity they intend to carry out. These guarantees are regulated by Law 26/2007 on Environmental Responsibility (Ley 26/2007 de Responsabilidad Medioambiental) and Royal Decree 2090/2008 (Real Decreto 2090/2008). By means of an environmental risk analysis, the aim is to identify and assess the possible risks that the activities may generate for the soil, water, sea and river banks, and biodiversity, and, depending on the results, to have sufficient funds available to address such possible environmental damage.

The Capital Companies Law and Non-financial Reporting

The Capital Companies Law (Ley de Sociedades de Capital) requires large companies, especially those with more than 500 employees, to file a Non-Financial Information Report. This obligation was introduced in 2018 by Royal Decree-Law 18/2017 (Real Decreto-ley 18/2017), which transposes European Directive 2014/95/EU. The report must include information on the policies adopted by the company regarding the environment, sustainability, human rights, diversity and other social aspects. This requirement aims to improve transparency and allow investors and the public to assess the environmental and social impact of business activities.

Climate Change and Energy Transition Law

Passed in 2021, the Climate Change and Energy Transition Law (Ley de Cambio Climático y Transición Energética) obliges certain large companies to calculate and publish their carbon footprint and design a plan to reduce their greenhouse gas emissions and adopt measures to improve energy efficiency and the use of renewable energy. This law sets a clear target of climate neutrality by 2050 and an emissions reduction of 23% by 2030, aligning Spain with the Paris Agreement commitments. Companies, particularly in energy-intensive sectors, must adjust their activities to meet these targets, adopting cleaner and more sustainable technologies.

LAW ON WASTE AND CONTAMINATED LAND

The Law on Waste and Contaminated Land (Ley de Residuos y Suelos Contaminados) was reformed in 2022 and focuses on waste reduction and the promotion of the circular economy. Companies must minimise waste generation and properly manage hazardous waste. In addition, should contamination of soil resulting from their activities be detected, they are obliged to decontaminate that soil. This law also provides for the Special Tax on Non-Reusable Plastic Packaging, commonly known as the ‘plastic tax’, which is levied on the manufacture, import or intra-community acquisition of non-reusable plastic packaging in Spain, as well as the tax on the deposit of waste in landfills, the incineration and co-incineration of waste.

 

European Union Regulations

EUROPEAN GREEN DEAL AND CLIMATE LAW

The European Green Deal is the EU's main strategy to achieve climate neutrality by 2050. Within this framework, the European Climate Legislation (Regulation (EU) 2021/1119) sets binding emission reduction targets, which directly impact businesses. Under this legislation, companies must align themselves with policies on energy efficiency, emission reductions and the adoption of renewable energy.

Corporate Sustainability Reporting Directive 

The new Corporate Sustainability Reporting Directive (CSRD) 2022/2464, which is to be phased in from 2024, extends the disclosure requirements for non-financial information of medium-sized and large companies. This directive harmonises the reporting of sustainability and environmental data, making it easier to make comparisons at the European level.

Green Taxonomy Regulation

The Green Taxonomy Regulation defines which economic activities can be considered to be environmentally sustainable, affecting financing and investment decisions for companies wishing to access capital for green projects.

 

Companies in Spain are subject to a complex and evolving regulatory framework, derived from both national and EU legislation. Complying with these obligations is not only essential to avoid penalties, but also offers opportunities to improve competitiveness and reputation in a business environment that increasingly values sustainability.

Please don't hesitate to contact us with any questions you may have about your company's legal or tax obligations in Spain.

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Date published: 20 December 2024

Last updated: 20 December 2024