SWEDEN Law and Practice Contributed by: Tove Andersson, Anders Linnerborg, Sara Eriksson and Ellen Lewin, Setterwalls Advokatbyrå AB
6.4 Shareholder or Parent Company Liability The polluter pays principle (PPP) is central in Swedish environmental legislation. The principle dictates that polluters should bear the costs for the effects of their pollution and for any measures required to prevent, limit and remedy these effects. In line with this princi- ple, the entity primarily held responsible for environ- mental damage or breaches of environmental law is the operator of the business or activity that caused the damage or committed the violation. Parent companies and shareholders can be held responsible if they are considered operators. 6.5 ESG Requirements Sweden’s ESG requirements incorporate national and international legislation and voluntary guidelines to ensure corporate responsibility and promote sustain- able development. There are several reporting require- ments relating to ESG. ESG reporting shall be made in line with the Swed- ish implementation of the EU Corporate Sustainabil- ity Reporting Directive (CSRD), which requires certain companies to report and disclose ESG information as part of their annual accounts. It shall contain the information needed to understand the company’s impact on sustainability issues and how these affect the company. The sustainability report must be pre- pared in accordance with EU reporting standards, the so-called European Sustainability Reporting Stand- ards (ESRS). The Swedish Financial Supervisory Authority ( Finansin- spektionen ) monitors compliance with the reporting requirements in Sweden. Non-compliance can result in administrative sanctions as well as criminal liability. As the reporting is part of the annual accounts, the board and the managing director are both responsible for the annual accounts being prepared in accordance with reporting requirements. The Swedish government has proposed that the obli- gation to prepare sustainability reports be deferred by two years for certain companies. This is due to an amending directive from the EU. The legislative amendments are due to enter into force on 31 Decem- ber 2025.
6.6 Environmental Audits The environmental law requirement to submit an annu- al environmental report (or in some cases an annual report) is the main environmental audit requirement (see 6.5 ESG Requirements ). There are general tax audit requirements related to environmental tax but these are not labelled environmental audits.
7. Personal Liability 7.1 Directors and Other Officers
If an environmental crime is committed during busi- ness activities, the company’s management is crimi- nally liable (see 6.1 Liability for Environmental Dam- age or Breaches of Environmental Law ). Insurance can be taken out by companies for employees and representatives of the company. Several providers offer insurance subject to their individual terms and conditions.
8. Insurance 8.1 Environmental Insurance
Several providers offer insurance subject to their individual terms and conditions. It can cover costs of judicial proceedings, contamination clean-up costs, third-party claims for damages and regulatory fines, etc. However, exemptions often apply when it comes to environmental law matters. Companies that seek legal advice from law firms can get assistance with applying for insurance coverage. There is no compulsory environmental insurance. However, for certain activities, there are requirements to provide financial securities ( ekonomisk säkerhet ). These aim to protect society from having to bear the cost of remediation in situations where the responsible operator has gone bankrupt or for some other reason cannot fulfil their obligations.
9. Lender Liability 9.1 Financial Institutions/Lenders
The entity in actual and legal control of the business, that is, the operator, can be liable for environmental
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