Faced with a regulatory context that radically changes reporting obligations sustainability data For large companies and SMEs, the startup Spanish TransitionX Europe proposes an integrated ESG consulting model powered by Artificial Intelligence so that companies go from seeing sustainability as a task of compliance to leverage competitive advantage.
What immediate steps should Spanish companies follow to comply with the requirements of the CSRD from 2025?
The new CSRD directive establishes new obligations regarding measurement and reporting that are much more detailed than the frameworks that many companies have been using voluntarily (GRI or IFRS for example). On a practical level, the first thing is to understand if the company enters the great wave that began on January 1 of this year: those with more than 250 employees, more than 25 million euros in total assets and a turnover of more than 50 million euros. All companies that meet two of these three requirements will be required to submit reports in 2026 using 2025 data. This year, only public interest entities subject to the previous Non-Financial Reporting Directive (NFRD) will have to submit 2024 data. )
It all starts with carrying out the double materiality analysis that seeks to analyze how the context impacts the company and how it affects the environment, determining the material (priority) issues on which it must report and prioritize its impact strategy. It is also critical to carry out pedagogical work to achieve the support of senior management and implement technology. software advanced technologies that substantially improve the quality of data management and simplify these processes to save time and costs.
What risks does not reporting effectively on ESG have for companies’ competitiveness?
Most organizations see regulation as the main source of pressure, but the truth is that this comes first and with greater force from their own value chains. Companies that do not begin to measure their impact and report it already see the risk of losing or difficulties in attracting both customers and investors.
Are Spanish companies prepared to face this wave of transformation in terms of transparency?
Large organizations clearly have more capacity and preparation to measure, report, establish and validate their strategies. 57% of the IBEX 35 already has their decarbonization roadmaps validated by SBTi. Better than the US but behind the UK.
Our SMEs are not prepared and are also finding it very difficult to adapt their internal processes to data collection and reporting. Delaying preparation as regulatory deadlines approach and organizations grow and become more complex can increase various risks and costs.
What are the main motivations to promote sustainability and begin to comply with ESG requirements?
Sustainability is no longer an ethical motivation but a strategic imperative to protect the competitiveness, growth and resilience of organizations. Transparency in communication is key to boosting trust, reputation and attractiveness in increasingly responsible markets.
66% of consumers globally are willing to pay more for products from committed brands. However, it notes that 42% of CEOs have trouble articulating an effective, engaging and accurate sustainability narrative. These are data from Nielsen and Kantar.
Differentiation in the supply chain is important to enhance the commercial success of SMEs. In addition, they can access sustainable financing (green bonds or loans linked to sustainability) with better credit conditions.
How can technology help companies streamline all these processes?
The complexity that the CSRD imposes on the private sector has been questioned, for example recently by the German government. Illustratively, its ESRS standards include more than 1,000 metrics or “disclosure requirements.” Using technology to process this data is key to ensuring greater traceability and quality of the data as well as agility to measure, analyze, extract business intelligence and prepare the report. In addition, it helps companies save costs, time, and allows them to regularly monitor sustainability data to take corrective actions to improve corporate performance.
Our technology covers carbon footprint measurement, double materiality analysis and CSRD reporting, and is developed by engineers from software Baltic States and has received the Platina Pele 2024 award. Through Artificial Intelligence functionalities, it is capable of detecting more than 1,000 ESG metrics in any internal document, improving the final audit process, and writing report content. Organizations that use our technology claim that they have saved between one and three months of project time by using this tool.
Measuring and reporting begins a process of transparency, but the key is to communicate our progress and commit to strategic and ambitious actions by designing robust policies that seek to generate profound changes.
How can companies prepare for the two new regulations on greenwashing?
Both the directive of Green Claims such as Empowering consumers for the green transition seek to promote more precise and tangible communication, based on data and without ambiguous or exaggerated statements. These regulations require that messages be pre-approved by independent verification entities and prohibit messages based solely on carbon credits.
The deadline for transposition is March 2027, but there are currently other regulations that companies must comply with. The Unfair Competition Law and the General Advertising Law, which have been in force for more than 20 years, prohibit certain bad practices. In fact, Iberdrola’s recent lawsuit against Repsol was based on these. There are also various ISO certifications (for example 14001, 14064) useful to communicate with rigor and confidence.
Scope 3 emissions represent up to 90% of the carbon footprint in some industries, but measuring and managing them remains a challenge for sustainability teams. What strategies should companies follow to manage and reduce them appropriately?
Scope 3 emissions account for up to 90% of the carbon footprint in some industries, but measuring and managing them remains a challenge. These are those generated throughout the entire value chain, they do not come from direct activities of the company, but from suppliers, distributors and customers. According to CDP, industries such as financial services, electrical machinery or electronic manufacturing top the list, as they depend on complex supply chains and external factors.
They generate controversy and difficulties for companies, since they cannot directly assume responsibility for third-party emissions and accurate measurement implies an additional burden. In fact, strong opposition and even judicial threats forced the SEC (USA) to renounce its regulatory claims in this area in 2022. In many cases, achieving that the partners measure and communicate is an odyssey. Once again, technology is a key tool, since it allows automating the collection and analysis of data, with the increasingly demanded support of specialized consulting firms.
What solutions does TransitionX Europe offer its clients and how is it different from traditional consultancies?
The solutions offered to organizations today do not effectively address their needs: software ESG do not usually offer the expert and active support that they demand and most consulting firms continue to use archaic Excels or software limited for data management and ESG reporting. In my opinion, internal inefficiencies (insufficient resources and equipment) and external inefficiencies (consulting without a technological base) are the reasons why companies today invest 43% more in reporting (talking) than in innovating and developing their sustainability agendas (doing ), according to IBM data.
Our startup combines integrated ESG consulting services and AI technology to, as a single provider, optimize the quality and agility of reporting (CSRD, Double Materiality Analysis, carbon footprint calculation), execute sustainability plans and communicate commitments and achievements with a powerful, responsible and inspiring narrative, validated by legal experts in anti-regulations.greenwashing.
The objective is to make companies stop seeing sustainability as a regulatory burden and start considering it a lever for their growth and a competitive advantage. We want organizations to focus on their core businessenergy transition and positive impact.
What is the profile of your customers and what plans does the company have in the short and medium term?
At the European level, it is estimated that more than 50,000 companies are obliged to comply with the CSRD, although as I say the pressure to measure and publish with transparency also comes from suppliers, clients, banks and investors. Listed European SMEs will be required to present their sustainability reports in just two years and we are already aware of their interest in starting to prepare.
We serve small, medium and large companies from all sectors, although certain industries are a priority for us due to their high environmental impacts and the different regulations they face. The profiles are also diverse, beyond the sustainability teams, also including financial and communication managers with increasing weight in ESG.
Many companies active in sustainability are resorting to the call greenhushingWhat is this phenomenon and how can TransitionX Europe help reverse it?
He greenhushing refers to the new trend that we are seeing in some companies and which consists of not communicating their sustainability practices to avoid scrutiny that seems uncomfortable to them.
Our recommendation to stop this trend is to start developing your data measurement system to mitigate or eliminate risks, as well as design transparent and honest communication strategies that show sustainability efforts with a tangible, data-based basis. We also work with marketing and communication agencies to train their teams in this area.
Which companies with impact could serve as inspiration in a context as complex as the current one?
The decarbonization of technologies that constitute the backbone of the new digital economy and society (softwareAI, cloud computingIoT), is one of the great challenges of the times we live in. In this context, I believe that SNGULAR is positioning itself as a leading firm by demonstrating a strong commitment to digital sustainability, focusing on improving the impact derived from the use of these innovations.
The company has implemented internal initiatives to achieve the goal of net zero emissions and, through its strategic collaboration with Google Cloud, is promoting the sustainable modernization of companies in Spain and Portugal.
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