On an economic front, Spain is one of the EU’s strongest players, with a GDP of $1.7 trillion in 2024.
This marks a welcome change from the country that was at the forefront of Europe’s debt crisis in 2008. However, a new challenge puts the fortune of the country at risk.
While climate change is affecting the whole planet, Spain is actually one of the most climate-vulnerable regions globally. The nation, for instance, is one of the 20 countries most affected by climate change in the past 30 years.
Further, in recent years, the country has been battered by extreme floods, crippling heatwaves and unexpected temperature fluctuations.
In response, a new generation of innovators and policy change makers are taking urgent action, driving Spain towards a greener future with sustainable energy, inclusive social policy, and ESG-aligned finance.
Climate emergencies continue to rise across Spain
While some countries in Europe have seen weather patterns change, in Spain, the picture is much more serious. Not only are extreme weather events happening more frequently, but they also often pose a serious risk to life and livelihoods.
Last June, the temperature hit over 46ºC in the Andalusian village of El Granado, making it the hottest on record. 20% of Spain is already experiencing desertification and extreme temperatures like this are exacerbating the problem.
In fact, a further 74% of the country is at risk of desertification. If this is allowed to transpire the impact on agriculture and the economy would be disastrous.
While mainland Spain is need of water, coastal regions have the opposite problem. In October 2024, Spain experienced one of its deadliest floods in decades, with the Valencia region and nearby areas suffering devastating impacts. The severity of the storm was linked to climate change.
The events of 2025 suggest this going to be an annual occurrence as Eastern Spain and the Balearic Islands battled more extreme flooding throughout the course of October.
Meanwhile, citizens in the capital of Madrid suffer from high temperatures in the summer, and extreme winters are becoming more common.
In 2021, Storm Filomena brought the heaviest snowfall in over a century and freezing temperatures for two weeks as a signal that the city is suffering from a climate ‘flip’ where conditions are switching quickly from dry to wet extremes.
Startups and the EU Green Deal
With the impact of climate change visible across Spain, it’s no surprise that the country is a leading champion for the EU Green Deal.
For example, Spain is leading on ESG integration through the Just Transition Strategy, focusing on coal-mining regions, climate law with a net-zero goal by 2050 and corporate governance frameworks aligned with CSRD and SFDR.
To keep progress on track, technology solutions will play an important role in helping to measure metrics across complex supply chains.
For instance, Credibl is a tech enterprise that leverages GenAI technology in the ESG space. Trusted by more than 150 leading organizations, the company simplifies complex sustainability challenges, like managing indirect emissions and delivering end-to-end traceability across products and supply chains.
Its AI-powered platform enables businesses to produce accurate, audit-ready sustainability reports that comply with international standards, while providing insights to manage climate-related risks and drive sustainable growth. The tech platform ensures that ESG isn’t a tick box exercise in compliance, but a framework to meaningfully advance decarbonization initiatives to create a sustainable future and meet net zero goals.
With Credibl’s platform available to companies across Spain, it’s set to advance ESG uptake and help to drive organizational change. Earlier this year, Credibl marked its presence at the ESG Tech Unlocked 2025 in Spain. The team joined ESG leaders, innovators, and technology partners at Spain’s first national event focused on tech-powered sustainability.
A new chapter for ESG in Spain
It looks clear that Spain is set to turn a corner. With over €163 billion in EU Recovery and Resilience Facility (RRF) funds, Spain is executing one of the most ambitious green transition programs in Europe. Spain is also recalibrating its governance, corporate culture, and social contract around ESG principles.
“Spain is not just seeking recovery—we are building a resilient, low-carbon, inclusive economy,” said Nadia Calviño, former Minister of Economy and now President of the European Investment Bank. “ESG is at the core of that transformation.”
Startups are helping to advance the progress towards a greener future in Spain through climate initiatives.
This article includes a client of an Espacio portfolio company
