Sustainability reporting in Sweden 

In this article we will describe sustainability reporting in Sweden, who is obligated to publish a sustainability report in Sweden, what should the sustainability report contain, and are there any specific rules one should be aware of before starting the reporting process. 

Who is legally required to publish a sustainability report in Sweden? 

In Sweden, the requirement for publishing a sustainability report is comparatively stricter than in most other European Union member states. 

1. In Sweden the companies meeting more than one of the following conditions during the last two financial years are liable to publish a sustainability report: 

  • Average number of employees is over 250
  • Balance sheet total is over 175 million Swedish crowns (approximately 16,5 million €)
  • Annual net sales are over 350 million Swedish crowns (approximately 33 million €) 

2. Companies meeting the following criteria are liable to report starting from March 2022, regardless of whether or not they meet the criteria set above: 

  • Company that is publicly listed on a stock exchange
  • Credit institutions
  • Companies trading in securities
  • Insurance companies 
  • Financial holding companies 

Group subsidiaries are not required to publish a sustainability report of their own if their data has been made publicly available in the group parent company’s sustainability report. However, in the case that the parent company’s sustainability report covers a subsidiary, the subsidiary will need to mention in its own annual report, the name, registration number, and registered office of the parent company, so that a person looking for the report will be able to find it. 

When it comes to financial institutions and listed companies, the authority in the responsibility of monitoring the compliance is the Swedish Financial Inspection Authority, Finansinspektionen

What is the legal basis for sustainability reporting in Sweden? 

In Sweden, just like everywhere elsewhere in the European Union sustainability reporting requirement is based on  European Union Directive 2014/95/EU “as regard disclosure of non-financial and diversity information by certain large undertakings and groups”. 

However, when it comes to the national implementation of the EU directive, Sweden has chosen a slightly unique approach in comparison to many, as the country has not been satisfied with merely fulfilling the minimum requirements set in the directive, but having a wider scope reporting requirement than the mere directive minimum.

When it comes to the legal requirement for sustainability reporting concerning financial institutions and insurance companies and other such companies, described in the previous paragraph, the reporting obligation stems from regulation (EU) 2019/2088 “on sustainability‐related disclosures in the financial services sector”, which has been enforced step by step between March 10th, 2021 and January 1st, 2022. 

The EU Directive has been implemented in Sweden in the Annual Accounts Act (1995:1554) (Årsredovisnignslag). You can find the full text concerning sustainability reporting requirements in Sweden from the Annual Accounts Act Chapter 6, Sections 10-14. 

The law entered into force in Sweden on December 1st of 2016, and it started creating practical obligations for companies starting from the financial year 2017 when they needed to start publishing annual sustainability reports as a part of their other annual reporting. 

sustainability reporting sweden hållbarhet rapport sverige
Jon Flobrant / Unsplash

What are the content requirements for a sustainability report? 

A company can choose whether they want to publish their sustainability report as a section in their annual report, or as a separate stand-alone document. In case the company chooses to do a separate sustainability report, it must mention that in its consolidated annual report.  A company may also choose to publish the sustainability report only on its website, and not at all in print, and in those cases, the sustainability report must be accessible on the website at the latest 6 weeks after the publishing of annual accounts. 

The sustainability report must contain basic sustainability information regarding the company, such as the: 

  • company’s business model;
  • type of policy that the company applies to issues as well as review procedures the company has implemented, and;
  • the outcomes of any policies.; 
  • A company must report on any significant risks it faces, that have a potential to cause negative environmental or social consequences in the company’s operations, including in its relevant business relationships, products and services.;
  • In addition to reporting on the risks, the company shall disclose in its sustainability report how it manages those sustainability related risks, and;
  • what types of key sustainability performance indicators it follows that are relevant for the business. 

When sustainability reporting is legally mandatory and the report is being published in accordance with the Swedish Annual Accounting Act, the report is as a logical continuum published in the Swedish language, because the other parts of the annual report are in Swedish as well.

On a group level, there is no specific language requirement when it comes to publishing a separate report. Thus, it is possible for a Swedish subsidiary of an international group to use the group parent’s sustainability report that has been published in English, if the group’s sustainability report covers all the legal requirements for sustainability reporting in Sweden. 

Which group entity should publish a sustainability report? 

In the case of a group, it is usually sufficient that the parent company of the group publishes its own report. Once the parent company of the group has a sustainability report, the group subsidiaries are able to refer to that report, naturally requiring, that the subsidiary has been covered in the report. 

In some cases, there may exist exceptions, for example with listed companies, credit institutions, and insurance companies, so it is always recommended to check the exact reporting requirement before assuming that the parent entity’s report will cover the whole group, or that the subsidiary would not need a report because the parent entity is not large enough to qualify for mandatory sustainability reporting requirements in Sweden. 

What if a Swedish company is not able to publish all the required information in a sustainability report? 

As a basic principle, a reporting company should disclose all the legally required information in its sustainability report.

However, it is not necessary for the company to disclose information that is still not confirmed, or that is under development or negotiations if the company considers that publishing such information would cause serious harm to the company’s market position and that the omission of such information doesn’t hinder the understanding of the company’s development, position or its results or the consequences of the company’s operations. 

sustainability reporting sweden hållbarhet rapport sverige
Pontus Wellgraf / Unsplash

What about voluntary sustainability reporting in Sweden? 

Voluntary sustainability reporting is rather common in Sweden because a voluntary sustainability report does not only improve transparency and work as a great marketing tool, it also enables a company to prepare in advance for the changing and developing reporting requirements ahead of the curve. 

Considering, that Sweden has already implemented a stricter reporting requirement than the bare minimum required by the EU directive, it is possible, that also once countries must enforce Corporate Sustainability Reporting Directive, CSRD, Sweden might impose stricter reporting requirements on its corporate citizens than the minimum level set in the directive, in order to maintain its position in Europe as the pioneering country for sustainability reporting and transparency. 

A voluntary sustainability report does not need to follow the exact legal requirements, because there is no legal obligation to follow the requirements, however, it will create a competitive benefit when the voluntary sustainability report is comparable with the mandatory ones and prepared in accordance with the most common standards. 

What is the Swedish industry standard in sustainability reporting? 

Industry-standard for sustainability reporting in Sweden is definitely the GRI standards. Global Reporting Initiative, GRI, is an independent organization that has been crafting sustainability reporting standards since the early 2000s and that has become the most popular standard to use for sustainability reporting in Europe, but also across the world. Over 70% of the world’s 250 largest companies use GRI as their sustainability reporting standard of choice because the standards are clear, comparable, and widely recognized on the global market. 

Sustainability report and sustainability reporting in Sweden hållbarhets raportering is sverige
Linus Mimietz / Unsplash

Where to find GRI-certified sustainability reporting professional in Sweden? 

In case you are looking for a GRI-certified professional in Sweden to take care of your company’s sustainability report, you have a selection of companies doing reporting on different topics. Askel Sustainability Solutions operates on the Swedish market and provides your business with a sustainability report as a one-stop-shop, and the service includes data collection, reporting, design, and Swedish translations, as well as anything else you might wish or need so that you can focus on running your business and feel secure with the quality and legal compliance of your company’s sustainability report.