Actualidad Spain

New provisions on non-financial information and diversity


Four years have gone by since the Official Journal of the European Union published EU Directive 2014/95, 22 October 2014, about the disclosure of non-financial information and diversity by major corporations and certain business groups. A very important piece of legislation that, as we have noted in previous editions of Progreso 13, aimed to improve institutional transparency and sustainability and raise levels of trust among investors, consumers and wider society.

Royal Decree 18/2017 was passed in November 2017 and a year later it is the turn of this bill, which definitively transposes the European Directive into Spanish law, putting Spain at the vanguard of business transparency.

The Bill amends the Code of Commerce, the Corporate Enterprises Act and the Auditing Act, furthermore setting out several reforms to the Collective Investment Institutions Act, covered in the first additional provision.

Although the Bill's contents are similar to those of the Decree, the new regulation introduces provisions that were not covered in such detail either in the decree or in the EU Directive:

Non-financial information statement

As well as establishing which companies are required to include a non-financial information statement in their management report, the Bill specifies what it should contain:

  • A short description of the group's business model, including its business environment, organization and structure, the market in which it operates, its aims and strategies and the main factors and trends that could affect its future development.
  • A description of the Group's policies, especially due diligence processes used to identify, assess, prevent and mitigate significant risks and impacts, including the measures adopted.
  • The results of these policies, which should include key non-financial result indicators so that any progress can be tracked and assessed; these indicators should make it easier to compare across companies and sectors.
  • The main risks inherent to the group's activities, with an explanation of the procedures in place to identify and assess them and also information about the impacts detected, with a list of these and of the key short, medium and long-term risks.
  • Key non-financial results indicators relating to the business' own activity, that satisfy comparable, material, relevant and reliable criteria, using widely applied standards that comply with European Commission guidelines and those of the Global Reporting Initiative. Each of the sections in the non-financial information statement must give their non-financial results.

The regulation specifies that the consolidated non-financial information statement will also have to include significant information about: i) environmental issues (pollution, circular economy and waste prevention and management, sustainable use of resources, climate change and protection of biodiversity); ii) social issues and those affecting staff (employment, work scheduling, health and safety, social relations, training, universal access to those with disabilities and equality); iii) respect for human rights; iv) the battle against corruption and bribery; and v) societal issues (the company's commitment to sustainable development, its policy on outsourcing and suppliers, questions affecting consumers and fiscal information).

It also stipulates that the management report be made available to the public free of charge and should be easily accessible on the company website within six months after the end of the financial year, and for a period of five years.

New responsibilities for the board of directors

The project lays out the following new responsibilities for the board of directors:

  • To strive to make the selection procedures facilitate diversity in terms of age, gender, education and professional experience, and for these procedures to promote the selection of female board members in sufficient numbers as to reach a balance between men and women.
  • To supervise the process of drawing up and presenting the financial information and the management report, the second of which should include the non-financial information statement, to ensure that it is complete and accurate.

Annual corporate governance report

The bill also specifies that the annual corporate governance report that companies have to publish should contain a description of their diversity policy as it applies to their board of directors and support committees, and to the management body, including: aims, measures taken and how they are applied, procedures to include on the board enough women to encourage a balanced gender mix on this body, and the company's results for the period covered by the reports. Entities must provide clear, reasoned explanations if no specific diversity policy exists.

Companies will also have to state in this annual report whether they have informed shareholders about their diversity criteria and targets, in the event of appointing or renewing members of the board, the support committees or management.


The amendments brought in by the bill will apply to the financial periods after 1 January 2018, for those companies filing consolidated accounts and meeting the following requirements:

  • Having on average during the period more than 500 workers employed by the companies in the group
  • Being considered institutions of public interest under the auditing legislation, or otherwise meeting at least two of the following circumstances for two consecutive financial periods, and on the end-date of both periods:
    • Total consolidated asset items above EUR 20 million
    • Net consolidated annual turnover above EUR 40 million
    • More than 250 workers employed on average over the period

Three years after the law comes into force, it will be mandatory for companies with more than 250 workers to present a consolidated non-financial information statement. It will also be mandatory for institutions of public interest within the terms of the auditing legislation, and for those meeting at least one of the following criteria for two consecutive periods and on the end-date of both periods:

  • Total assets above EUR 20 million
  • Net annual turnover above EUR 40 million