Sustainability Regulations and Their Impact on Private Capital in Spain (SpainCap (ex-ASCRI))

Summary

• The CSRD applies to all EU companies meeting two of three criteria on two consecutive balance sheet dates: over 250 employees, total assets exceeding €25 million, or net turnover exceeding €50 million.p.17
• Non-EU companies with significant EU activity fall under CSRD if they generate net annual EU turnover exceeding €150 million for two consecutive financial years.p.17
• Spain's 2030 climate goals include achieving a 42% share of renewable energy in final energy consumption.p.27
• Spain aims to reach 74% renewable electricity generation and reduce primary energy consumption by 39.5% by 2030.p.27
• In Spain, non-quoted companies exceeding 250 employees and either €20 million in assets or €40 million in net turnover must include a consolidated non-financial information statement in their management report.p.28

Key insights

1. While SFDR was designed purely as a disclosure regime, financial market participants actively use Article 8 and Article 9 classifications as a de facto product labeling system.p.11
2. Financial market participants must perform individual evaluations for each investment to determine compliance with the sustainable investment definition under Article 2.17 of SFDR.p.13
3. The market-derived concept of Article 8 plus funds has grown popular among private capital managers aiming to show high sustainability ambition without restricting their entire investment universe.p.14
4. The CNMV clarified that the sustainability annex to the annual report accompanies but does not form an integral part of the annual accounts or management report for private equity funds.p.15
5. CSRD mandates double materiality reporting, requiring companies to disclose both how socio-environmental issues affect their financial condition and how their activities impact society and the environment.p.18
6. Starting in 2024, financial institutions are required to report Taxonomy alignment key performance indicators for FY2023 financial data.p.24
7. Spain's Climate Change Law imposes mandatory annual climate risk reporting based on the TCFD framework for credit institutions, insurance firms, and large non-financial companies.p.29