PORTUGAL Law and Practice Contributed by: Assunção Cristas, Catarina Pinto Correia and Carolina Vaza, VdA
and opportunities, establishing liability provisions for companies. The demand for climate response initia - tives is a growing trend, produced both by pressure from investors and also the feeling that consumers increasingly value the sustainability commitment of companies and institutions. Investment and industrial operational decisions tend to influence each other, and the shortage of green assets might turn out to be a powerful engine. The financial sector, as a whole, is expected to play a relevant part in these transforma - tions. 4.2 Directors’ Climate Change Liability Directors or persons who hold a management position in companies are responsible, on a subsidiary level, for the payment of fines and procedural costs related to environmental administrative offences. The major - ity of misdemeanours due to environmental damage are regulated by the Environmental Misdemeanour Framework Law. According to this legal regime, envi - ronmental misdemeanours can be considered light, serious or very serious, depending on the gravity of the infraction. For very serious environmental mis - demeanours, the applicable fine ranges between EUR10,000 and EUR200,000 for individuals and between EUR24,000 and EUR5 million for companies. Whenever the presence, emission or release of one or more hazardous substances seriously affects the health, safety of persons and goods, and the envi - ronment, the minimum and maximum limits of the above-mentioned fines may be elevated to double the amount. For serious environmental misdemeanours, the applicable fine ranges between EUR2,000 and EUR40,000 for individuals and between EUR12,000 and EUR216,000 for companies. For light environ - mental misdemeanours, the applicable fine ranges between EUR200 and EUR4,000 for individuals and between EUR2,000 and EUR36,000 for companies. Ancillary penalties can also be applied alongside very serious and serious environmental misdemeanours, comprising the following: • prohibition against applying for subsidies and pub - lic benefits; • prohibition against participating in public tenders; • suspension of licences and authorisations;
• closing down of industrial facilities or sites subject to authorisation or licensing issued by a public authority; • sealing of equipment; and • seizure of animals. Additionally, the Climate Framework Law foresees that the duties of care, loyalty and reporting on account - ing imposed on directors or members of governing bodies with supervisory functions must include the careful assessment of the risk that climate change poses to the business model, capital structure and assets of companies. However, the Climate Frame - work Law does not foresee any sanctions, nor any type of liability, for the non-compliance with these duties. The amendments introduced to the Commer - cial Company Act by Decree-Law No 89/2017, which transposed the Non-Financial Reporting Directive, Directive 2014/95 (EU), into the Portuguese legal order, imposes on the directors of companies of public interest with an average of 500 employees the duty to include non-financial demonstrations in the manage - ment report. The report must contain information on the evolution, performance, position and impact of the company’s activity regarding environmental matters, namely impact on climate change. It shall be noted that the number of companies, and consequently of directors, to which these duties are applicable, will grow after the approval of the legal instrument that will transpose the CSRD into the Portuguese legal order, which must have occurred, initially, until 6 July 2024. A delay in the implementation of the CSRD for countries that have not yet completed the transposition of the directive (such as Portugal) has been granted, until 19 March 2027. This extension will allow the directive to be implemented with the proposed amendments – namely those introduced by the Omnibus I legisla - tive package – already included, reducing regulatory uncertainty. 4.3 Shareholder or Parent Company Liability According to Article 72 of the Climate Framework Law, harmful acts and omissions that accelerate or contrib - ute to climate change give rise to liability. Misdemean - our penalties will be laid down in a separate statute, still to be approved. Article 72 provision assumes an important dissuasive function for:
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