• Companies must accompany their annual report with details on their environmental and diversity policies, among others.
  • With the future approval of the Law, the European directive that aims to measure the social impact of companies will be transposed

The Council of Ministers has approved the first draft of the Draft Law for the transposition of the European Directive on the disclosure of non-financial information and on diversity by large companies and certain business groups. The text will be sent to the Council of State to receive an opinion before its approval as a bill and subsequent parliamentary processing.

This transposition modifies article 49 of the Commercial Code, articles 252 and 540 of the Consolidated Text of the Capital Companies Law and the Accounts Audit Law with a dual objective:

  • Increase the non-financial information in the management report that accompanies the individual and consolidated annual accounts regarding social and environmental issues, as well as information on personnel, respect for human rights and the fight against corruption. The objective is to identify risks for sustainability and increase the confidence of investors, consumers and society.
  • Expand the content required in the annual corporate governance report published by listed companies, including the disclosure of the policies of diversity of competences and points of view that apply to its board of directors in matters of age, gender, disability, training or professional experience.

Specifically, with regard to environmental issues, the European Directive states that companies will have to provide detailed information on the current and foreseeable effects of the company's activities on the environment and, where appropriate, health and safety. , energy use, greenhouse gas emissions, water consumption and air pollution.

Regarding social and personnel issues, the information will refer to measures taken to ensure gender equality, working conditions, social dialogue, respect for trade union rights, safety in the workplace and measures for dialogue and protection with local communities. In relation to human rights, information on prevention and measures will be included, as well as on corruption.

Disclosure of non-financial or corporate social responsibility related information helps to measure, monitor and manage the performance of companies and their impact on society. In accordance with the Directive, companies must present this information including a description of the policies and results in these matters. This information must be incorporated into the company's management report or in a separate report corresponding to the same year that includes the same content and meets the requirements.

These regulatory changes affect large companies with consideration of public interest entity that meet the following requirements:

– Average number of workers during the year exceeding 500

– That during two consecutive exercises it meets at least two of the following circumstances:

  • That the total of the asset items exceeds 20 million euros
  • That the net amount of its annual turnover exceeds 40 million euros
  • That the average number of workers employed during the year is greater than 250

On the other hand, the regulation on compensation, settlement and registration of securities has been approved for adaptation to community regulations. The objective of these changes is to allow the adaptation of Iberclear, the Spanish payment and securities settlement platform, to Target2-Securities, the pan-European platform of which it will form part since September of this year and to reinforce the protection of the guarantees granted in the securities clearing and settlement operations.

The reform is structured in two phases. A first, already completed, in which operations on equity securities are cleared in a central counterparty chamber and are settled in two business days using a balance system. And a second, in which the Spanish fixed income settlement platform (CADE) is adapted to the new system and the whole system is migrated to Target-2 Securities in September 2017. For this second phase, proceed now modify Royal Decree 878/2015 to specify its application to fixed income securities, indicate the date of application of the reform for fixed income and make some operational aspects more flexible

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