Garrigues Sustainable Newsletter - July 2024
In this newsletter we compile the most relevant legal news on ESG matters in Spain, published by Garrigues and G-advisory.
The clock starts ticking for companies following approval of the corporate sustainability due diligence directive
The clock starts ticking for companies following approval of the corporate sustainability due diligence directive
The EU act setting out companies’ obligations in relation to the human rights and environmental impacts of their activities is already a reality. Companies are now well advised to familiarize themselves fully with the obligations, and especially, the liability to be faced by the companies included in its scope (and any that will be indirectly impacted).
New obligations resulting from the European directive on pay transparency that companies will have to face
In a new edition of the Sustainable Garrigues Dialogues, we discuss the main changes that the new European directive on pay transparency, approved in 2023, will entail, and how Spanish companies can prepare for its transposition.
Legal news
After it has come into force, companies will have to start the steps needed to ensure fulfillment of the directive’s obligations within the time periods imposed by the European Union. To assist with this task, we share below a chart with the key dates when the obligations for companies will come into force in the member states.
Europe promotes repairs in its quest to achieve a circular economy
Manufacturers will have to repair any goods for which the EU lays down repairability requirements where the defects are not due to the non-conformity of the goods with a sales contract.
The European Union sets its sights on the complete decarbonization of the building stock by 2050
The new directive on the energy performance of buildings tackles the need to reduce the environmental impact of the building sector, which accounts for 40% of total energy consumption in the EU and 36% of its greenhouse gas emissions.
Directive 2024/1203 strengthens European environmental criminal law and requires Member states to ensure that such activities are punishable under their laws by 21 May 2026. It also establishes a profuse penalty regime that Member states will have to observe when determining the penalties to be imposed for such conducts.
How the EU will limit the sale of commodities that cause deforestation
Barely five months from now, the obligations contained in the European Regulation on deforestation aimed at avoiding the introduction, making available and export of certain commodities and products associated with deforestation and forest degradation, will be applicable in general in the Member States.
The regulation, which came into force on July 18, introduces a digital product passport, which enhances traceability and information on sustainability, prohibits the destruction of unsold products and lays down green public procurement requirements in order to boost demand for sustainable products.
The CNMV's new guide on audit committees includes new indications on sustainability reporting
The updated document brings the terminology used into line with the provisions of the CSRD Directive, draws a distinction between the roles of audit committees and those of sustainability committees, and offers recommendations regarding the assurance provider, among other questions.
The draft of these non-binding guidelines, prepared by the Committee of European Auditing Oversight Bodies (CEAOB), addresses important aspects such as the processes necessary to understand and assess how entities determine eligible and ineligible activities and obtain information on the value chain, or the format and content of the limited assurance report itself.
Certain hybrid or electric vehicles and new charging facilities will be eligible for free depreciation
Royal Decree-Law 4/2024, of 26 June, introduces important tax novelties. Among them, the accelerated depreciation foreseen for certain new vehicles (FCV, FCHV, BEV, REEV or PHEV) or new charging facilities is replaced by a free depreciation, with effect for tax periods beginning on or after January 1, 2024 and not ending on June 28, 2024.
These standards, which have applied since January 1, 2024, specify the information that companies must disclose on sustainability matters, as well as the uniform manner in which they must present it.
Trends
The Spanish tourist sector faces news requirements to avoid food waste
The Food Loss and Waste Prevention bill establishes a series of obligations for the food chain – which includes hotels and restaurants – such as having a plan to prevent food losses, reaching agreements to donate their surpluses or allowing customers to take back uneaten food.
This European regulation, which marks a first worldwide, includes, apart from control mechanisms, measures to promote the development of these technologies sustainably.
The 2023 directive on equal pay for men and women contains a series of pay transparency measures that Member States will have to adopt. Although Spanish legislation already contains measures in this subject, the directive goes further. It is therefore advisable to prepare for the regulatory changes that will come with its transposition into Spanish law. Below we analyze the main novelties.
Reduction of the maximum working hours: 4-day week or fewer hours in annual calculation?
There has been much comment in recent years about the possible reduction of the working week to 4 days. However, this change is not exempt from debate due to the impact it will have on the business organization. For a legislative change in this respect, the formula for implementing this reduction is still to be decided: eliminating one working day a week or reducing the maximum working hours on an annual basis.
The new strategy, built around three pivots and eight levers with specific initiatives, updates and extends the Spanish Government’s previous measures, adapting them to the most recent technological advances in this area.
Latin America
Reduction of working hours: a global trend reaching Latin America
The reduction of working hours has been a key issue on the legislative agenda worldwide in recent years, and Latin America is no exception. While countries like Chile are already reducing the workweek from 45 to 40 hours and Colombia from 48 to 42, other jurisdictions like Mexico and Peru also have proposals on the table in this regard, but they have not yet been finalized.
Garrigues Sostainable
Garrigues Sustainability Report 2023
We are presenting the 2023 Garrigues Sustainability Report on the firm’s policies, initiatives, parameters and goals in environmental, social and governance matters relating to the year ended December 2023.
Garrigues, fifteen years as the law firm with the best reputation in Spain, according to Merco
Garrigues has been ranked 68th in the Merco Companies ranking. Fernando Vives, Garrigues’ executive chairman, once again features among the country’s best valued business leaders in the Merco Leaders ranking.
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