Carbon reporting in Spain – CSRD and beyond

This summer’s wildfires, covering over 300,000 hectares, catalysed a sweeping 10-point climate emergency plan from Prime Minister Pedro Sánchez on 1 September 2025. At its core is mandatory carbon reporting – a major shift from previous voluntary measures and part of Spain’s broader effort to align with European sustainability reporting standards.

The legal framework explained

Spain’s new carbon reporting rules are primarily established by Royal Decree 214/2025, which transforms the carbon footprint registry into a binding requirement. This national legislation builds on the foundations of:

• Law 7/2021 on Climate Change and Energy Transition, which sets Spain’s broader climate targets and authorises mandatory disclosure of carbon data.
• The Non-Financial Reporting Directive (NFRD), which originally required large companies to disclose certain ESG information.
• The Corporate Sustainability Reporting Directive (CSRD), which strengthens the scope of sustainability reporting requirements across the European Union and introduces detailed sustainability reporting standards under the ESRS (European Sustainability Reporting Standards).

Who’s covered by the new rules

Royal Decree 214/2025 applies to:

• Private companies that fall under Law 11/2018 (Spain’s transposition of the NFRD). This means companies with over 250 employees and either assets > €20 million or turnover > €40 million for two consecutive years. These are considered public interest entities because of their size and impact.
• Public entities, including ministerial departments, autonomous bodies, Social Security agencies, and other government institutions.

In total, around 4,000 public and private entities will be required to comply. SMEs are not automatically included, though they may be indirectly affected through supply chain demands or access to finance.

Sustainability reporting requirements: What businesses need to report and when

• Reporting begins in 2026, using 2025 data, and covers:
  • Scope 1 (direct emissions)
  • Scope 2 (indirect emissions from energy)
• Scope 3 (value-chain emissions) becomes mandatory from 2028 for large entities.
• Reduction plans: From 2026, companies must publish five-year greenhouse gas reduction plans with measurable sustainability targets, hosted on their website or in their sustainability reporting documents.
• External assurance is required in certain cases: for large companies, when applying for subsidies, or if Scope 3 makes up a significant share of emissions.

Alignment with the EU’s Corporate Sustainability Reporting Directive (CSRD)

The EU’s CSRD significantly expands the scope of sustainability reporting compared with the NFRD. The CSRD aims to increase greater transparency and accountability in sustainability disclosures. It introduces:

• A double materiality assessment, covering both financial materiality (risks and opportunities affecting company value) and impact materiality (how business activities affect people and the environment). Companies must assess sustainability matters from two perspectives: financial materiality and impact materiality.
• Harmonised sustainability reporting standards under the ESRS, ensuring consistency across the EU. The ESRS includes reporting on the circular economy, resource use, and the classification system for economic activity under the European Taxonomy.
• Stricter reporting requirements for large companies and listed SMEs, with a focus on sustainability issues such as climate risk, biodiversity, and social impact.

Spanish companies covered by the CSRD must report sustainability information alongside their financial reports. The CSRD requires companies to disclose how their business model and economic activities contribute to sustainability objectives and sustainable investment. The CSRD and ESRS are designed to ensure coherence with other EU laws and regulations. The first CSRD-compliant reports are due in 2025 (covering 2024 data). This means Spanish firms working toward CSRD compliance will already have a strong foundation for meeting national carbon reporting rules.

How businesses should prepare

1. Identify if you’re covered: Check whether your organisation falls under the NFRD thresholds or qualifies as a public interest entity.
2. Measure emissions now: Build a complete Scope 1 and 2 inventory for 2025 to meet upcoming reporting requirements.
3. Prepare for Scope 3: Begin engaging supply chains and gathering data on indirect emissions.
4. Develop a five-year plan: Set measurable sustainability targets and link them to your overall business strategy.
5. Align with CSRD: Ensure reporting systems meet ESRS and broader EU sustainability reporting requirements.
6. Assess risks and opportunities: Conduct a double materiality assessment to identify both financial risks and broader impacts. Incorporate risk management processes to enhance accountability and long-term resilience, and ensure you consider human rights impacts as part of your assessment.
7. Integrate reporting processes: Position your sustainability reporting alongside financial disclosures to meet investor and regulator expectations. Engage other stakeholders, such as employees, communities, and consumers, to ensure transparency and inclusivity in your reporting.

How ESG software can help

The complexity of carbon and sustainability reporting makes manual processes inefficient. ESG and carbon accounting platforms can:

• Automate data collection across business units, facilities, and supply chains.
• Ensure accuracy using recognised methodologies and emission factors.
• Report sustainability information in line with European sustainability reporting standards and CSRD requirements.
• Support assurance with audit-ready reports, easing verification and compliance.
• Track sustainability performance against reduction plans and long-term sustainability targets.
• Model financial risks and opportunities, linking climate data to strategic planning.

By embedding ESG software into reporting systems, companies can achieve csrd compliance, improve efficiency, and strengthen their contribution to a sustainable economy. Effective use of ESG software also helps organizations achieve sustainable growth by turning compliance into a strategic advantage.

Final thoughts

Spain’s move from voluntary to mandatory disclosure represents a step-change in business regulation. With binding sustainability reporting standards, double materiality assessments, and strict reporting requirements, companies that act early will ensure compliance, improve sustainability performance, and maintain competitiveness in the transition to a sustainable economy.

To achieve this, businesses need the tools to turn emissions data into board-level insight and hold them accountable for progress.