Spain faces sanctions for delay in transposition of CSRD directive

On Thursday 26 September, the European Commission informed Spain and 16 other Member States that it had opened an infringement procedure because of delays in transposing into national law a directive requiring large companies to report on their environmental impact. The 17 countries concerned, including Austria, Belgium, Cyprus, Czech Republic, Estonia, Finland, Germany, Greece, Latvia, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Estonia, Latvia, Malta and the Netherlands, have not yet reported full transposition of the directive's provisions into national law by the deadline of 6 July 2024.
 

This directive, on which we already did a post, imposes new regulations on sustainability disclosure, obliging large companies and listed companies to disclose data on the social and environmental risks they face, as well as the impact of their activities on people and the environment. The new sustainability guidelines would be applicable from this year 2024 for reporting in 2025. If these rules are not transposed, the level of harmonisation required in the EU will not be achieved, and investors will not be able to assess the sustainability performance of companies when making investment decisions. For example, in Spain, Law 11/2018 of 28 December on non-financial information and diversity to promote positive social impact is now still in force.
 

Countries now have two months to respond and remedy the shortcomings identified by the Commission. If they do not provide a satisfactory response, the Commission may choose to take their governments to the Court of Justice of the European Union (CJEU), which we hope will not happen. The alternative, however, is an immediate transposition that is sure to make the sustainability teams of the companies obliged to do so very nervous.