The European Commission has adopted targeted “quick fix” amendments to the first set of European Sustainability Reporting Standards (ESRS). This is aimed at reducing the burden and increasing certainty for companies that had to start reporting for financial year 2024 (commonly referred to as “wave one” companies).

According to the current ESRS, companies reporting on financial year 2024 can omit information on, amongst other things, the anticipated financial effects of certain sustainability‑related risks. The “quick fix” amendment, which applies from financial year 2025, will allow them to omit that same information for financial years 2025 and 2026.

For financial years 2025 and 2026, wave one companies with more than 750 employees will benefit from most of the same phase-in provisions that currently apply to companies with up to 750 employees. A summary of the modifications can be found here.

Wave one companies were not captured by the “stop‑the‑clock” Directive, which delayed sustainability reporting requirements for companies that report from financial year 2025 and 2026 (so‑called “wave two” and “wave three” companies) by two years. This Directive was part of the Omnibus I package adopted by the Commission in February 2025.

The Commission is working on a broader revision of the ESRS, with the aim of substantially reducing the number of data requirements, clarifying provisions deemed unclear and improving consistency with other pieces of legislation. It is expected that this review will be completed by financial year 2027.

Despite the ongoing delays and simplifications at EU level, assessing and reporting on your organisation’s nature impacts is still a vital and urgent part of any organisation’s long-term strategy – ignoring your dependencies and impacts on nature means ignoring the potential risks, both financial and reputational, to your business as well as the physical risks that damaging and degrading nature does to our planet, society and to your business’s resilience and longevity.

You can be a leader in your field by tackling these issues now – we’ll show you where to start. Sign up to our Nature Strategy Accelerator Programme today – join the Discovery Track for free to learn more – or contact our Business Development Manager Dr Maria Fitzpatrick for a chat on how to get started on a solid Nature Strategy for your organisation. We will be accepting new businesses to our Action and Strategy Tracks now ahead of our 2026 programme of workshops, peer learning and expert one-on-one guidance – email manager@businessforbiodiversity.ie

2024 was an eventful year for those of us working in advancing nature action at both national and global level.

The much-contested  EU Nature Restoration Law  was brought in – and the Green Party, which was in Government at the time, with Ireland’s first Minister for Nature Malcolm Noonan, were instrumental in getting it over the line. However, there remains political pushback at home and abroad as we enter 2025 and environmental concerns slip further down the agenda in the face of the cost-of-living crisis, political turmoil and global conflict. 

Extreme weather incidents are putting these concerns squarely back on the agenda for the private sector as we start 2025, particularly in the area of insurance and financial investments. Fears are being raised in the food sector due to the climate and nature crises, and we will likely see tourism, hospitality and retail affected globally, as well as a rise in public health concerns. The latest  WEF Global Risks Report  rates several environment-related risks in prominent positions in their Top 10 for a 10-year analysis, with the risk from biodiversity loss and ecosystem collapse ranked in second place, after extreme weather events. The short-term (2 years) risk analysis ranks extreme weather events in second place, however, the risk from biodiversity loss and ecosystem collapse is not as prominent yet on the short-term list of worries for polled business leaders. This is surprising given that it is now widely understood that biodiverse ecosystems create resilient landscapes and enhance carbon sequestration, lessening the effects of climate change such as extreme weather events. (The Economics of Biodiversity aka the Dasgupta Review, for the UK Treasury in 2021, warns we must start accounting for nature’s contributions in national accounts to inform decision-making for future resilience).

We welcome the announcement of a new Minister of State for Nature, Heritage & Biodiversity, Christopher O’Sullivan TD, at the Department of Housing, Local Government and Heritage, and hope concrete and swift action on nature loss and degradation will be set in motion once Ireland’s National Restoration Plan, being developed by the  National Parks & Wildlife Service  in conjunction with relevant stakeholders, is finalised. The new  Programme for Government  pledges to keep the Infrastructure, Nature & Climate Fund, instigated by the previous government, with plans to pursue more funding at EU level, and delivery of Ireland’s  National Biodiversity Action Plan 2023-2030,  which sees a whole-of-government, whole-of-society approach. We look forward to continuing to work with a number of government departments in developing and implementing actions to support businesses in achieving this. 

Despite an uneven progress following successive global summits on climate and nature, BFBI agrees with recent commentary by Business for Nature’s CEO Eva Zabey that interest levels and discussions on biodiversity within the business and policy world are certainly “maturing and multiplying”. “Tackling complex issues such as biodiversity loss and its interconnections with climate and social equity takes time, where global discussions remain key, even if they don’t always result in the urgent progress we are collectively striving for.

“This requires all of us to act with both urgency and perseverance. We take heart in the progress made over the past 12 months by our fantastic community and partners, and by the growing number of businesses and policymakers committed to building a nature-positive future for all by 2030.”

Zabey lists some key highlights from the past year, including the introduction of the EU’s Corporate Sustainability Reporting Directive (CSRD) in effect for 11,000 companies in 2025.

Over 500 companies have committed to disclosing their nature-related issues to investors using the TNFD recommendations – a 57% increase since the beginning of the year, 30 companies have published dedicated nature strategies through It’s Now for Nature and first mover companies publicly adopted science-based targets for nature. These are encouraging signals of change.”

However voluntary action by businesses is far from the norm, and many organisations still do not understand their impacts and dependencies on nature. There is confusion among Irish companies on the scope of the new reporting rules, with a number of our larger legal firms seeking clarification from the Government on how the legislation is to be applied in Ireland.

It is essential that the new Government and the business sector show leadership in making this the year to accelerate our transition to Nature Positive rather than risk playing catch-up – if you are new to it all, start here on our free Discovery Track with access to the evolving guidance and resources coming your way in 2025, including our free webinar series.

Those keen to make the commitment to put prior learning and resources into action now can join our Nature Strategy Accelerator Programme’s paid Action Track for tailored help to get your reporting on track, and be ready to make real positive impact for your business and for nature. We’ll help you to advance to our Strategy Track and Evolution Track, through our Roadmap to Nature Positive (in alignment with the global Now for Nature Strategy), to maintain a steady path to long-term sustainability.

Get on track HERE.

 

With only a quarter of our wild species remaining on the planet, we need to act now to protect what’s left, writes BFBI Executive Director Lucy Gaffney. 

As COP29 in Baku, Azerbaijan draws ever closer, the alignment of biodiversity and climate is emerging as a key theme, with nature featuring specifically on day 10 (21st of November), the penultimate day.

The latest WWF Living Planet Report reveals some grim statistics about the current state of nature globally. We are now showing a decline of 73%, a drop of almost three quarters, in the average size of our monitored wildlife populations, with over a million plant and animal species at risk of extinction. Humans have already altered three quarters of our planet’s land surface and two thirds of our marine environments. Although changes in the environment may appear gradual and relatively small, we are beginning to see evidence of their cumulative effects and there are concerns that we are approaching dangerous, irreversible tipping points. If we tip over, the results may be catastrophic. 

Tipping points 

When our planetary systems surpass a tipping point, the results can be unpredictable, and potentially devastating. Nature is approaching these tipping points much faster than predicted. Perhaps we’ll see the collapse of local fish stocks, impacting the livelihoods of the local community. Maybe we will bear witness to regional fish stock collapse on a larger scale that may have a much larger impact on the global economy, destabilising supply chains and income streams on a much grander scale. This is not just an environmental issue, it will affect everyone, everywhere. 

What systems are close to breaking point?  

The Amazon Rainforest supports more than 10% of the planet’s biodiversity and 10% of all known fish species. More than 47 million people call it home. In terms of carbon storage, it sequesters between 250 and 300 billion tonnes of carbon. But decades of deforestation and degradation driven by the beef, soy and palm industries have compromised the Amazon’s resilience. There are fewer trees, leading to less rainfall and increased drought risk. With increasing global temperatures, the Amazon is getting hotter and drier. This means that it is vulnerable to wildfires and is at an increased risk of entering into a vicious cycle of heating and burning. We will feel the impact of this on a global scale with decreased rainfall in water-stressed areas, reduced agricultural productivity and increased food and water scarcity. 

If the Amazon reaches this tipping point it would flip from being a climate ally and would start accelerating climate change. It is estimated that the destruction of Amazonian plants and trees will release 75 billion tonnes of carbon into the atmosphere. So how close are we to tipping the scales? This WWF report predicts that if we remove 20-25% of the Amazon Rainforest, the system will tip. We’re at 17%. 

This is just one critical tipping point. We are also dangerously close to 4 other tipping points, each of which has the potential to push other planetary systems closer to the edge, threatening our earth’s life support systems and society as we know it. 

Melting Ice Sheets in Greenland and the Antarctic have the potential to significantly alter oceanic circulation systems and cause sea levels to rise by several metres. 

Dying Coral Reefs could destroy fishing zones, impacting hundreds of millions of people who depend on the reefs for sustenance. Coral reefs also offer flood and storm protection for these local communities. 

Changing Ocean Currents will devastate marine ecosystems and alter global weather patterns resulting in more extreme winters and more intense summer heatwaves, particularly in Europe. 

Melting Permafrost releases greenhouse gases and other contaminants into the ocean. 

We know what we need to do! 

Nature is remarkably resilient, and if afforded the chance, it will recover. We know what we need to do to alter this disastrous trajectory. Restore ecosystems and increase their resilience. We need to transform our food and energy systems, the main drivers of biodiversity loss and climate change. We need to move money away from damaging activities and fossil fuel investments, and towards nature restoration and protection. 

Ecological breakdown is happening as a result of unrestricted, uncontrolled economic endeavours and business and industry have a critical role to play in turning the tide. Target 15 of the Global Biodiversity Framework asks that businesses assess and disclose their impacts on nature, with a view to creating and implementing a nature strategy that will limit the damage they are doing. The goal is to shift business models into a nature-positive mode, where activities no longer harm the natural world and resources are deployed towards the protection and conservation of what we have left, that 27%. The Global Goal for Nature calls for a halting and reversing of nature loss by 2030, and a trajectory of recovery from then on. 

The world is waking up and we now recognise the need for change. There’s no shortage of knowledge, people or passion to achieve our objectives and turn things around. What we need now is urgent action. Governments, businesses and communities need to mobilise to ensure that we have a healthy planet to pass on to future generations. Individual behaviours matter, mindset matters. Society has the power to change both. With our collective efforts, nature can bounce back.   

Lucy Gaffney is Executive Director of Business for Biodiversity Ireland – join today and we can help your business understand your impacts and dependencies on nature and create a strong nature strategy.  

 

 

The World Benchmarking Alliance has released an updated Nature Benchmark, assessing how more than 800 major companies across varied sectors are impacting nature and protecting and restoring ecosystems.

Using company data and performance from 2022-2024, the research finds that, although some companies are helping to halt and reverse biodiversity loss, the majority do not yet fully understand how they impact and depend on nature. Only 5% of all companies have carried out an assessment of the impact of their operations on nature, and less than 1% have assessed their dependencies on nature.

The research, which explored the performance of companies such as Unilever, Kering and Nestlé, assessed companies across plastics, water stewardship, environmental rights, and board-level accountability, finding worrying gaps in key areas such as water use, ecosystem conversion and respecting local communities’ rights.

Two industries outperformed the rest in terms of ranking: Personal & Household Products, with an average score of 26 out of 100, and Pharmaceuticals & Biotechnology, with an average score of 20.

Nature blind spot: only 5% of companies assess their impact, and less than 1% understand dependencies

Only 5% of companies have carried out an assessment of the impact of their operations on nature. Less than 1% of companies have carried out an assessment of their dependencies on nature. This is worrying, as it means that companies cannot strategically manage and prioritise their actions on nature. Although some companies have started to assess their impacts and dependencies, they often only cover a fraction of their operations or don’t publish the results. They also tend to focus on land or freshwater, neglecting the marine realm. The landscape is rapidly changing – the EU Corporate Sustainability Reporting Directive, which has just come into effect, will require many large businesses to disclose their material sustainability impacts and dependencies from 2025 and will affect smaller companies down the line.

Regardless of their current regulatory requirements, all companies should begin applying a risk management and disclosure framework such as the Taskforce on Nature-Related Financial Disclosures.

You can view and filter companies involved by ranking and sector here: https://www.worldbenchmarkingalliance.org/publication/nature/rankings/

Companies overwhelmingly disregard Indigenous Peoples’ rights

Indigenous Peoples and local communities often live in critical ecosystems and coexist with threatened species. They manage about 40% of all terrestrial protected areas and their ecological knowledge enables a sustainable existence worldwide, yet less than 13% of companies assessed express a clear commitment to respect Indigenous Peoples’ rights.

As water insecurity rises, companies must accelerate their water stewardship

72% of the world’s population is water insecure. Findings show that 29% of companies are reporting water use reductions or disclosing water usage from water-stressed areas, suggesting a growing awareness of their role in ensuring water availability worldwide. However, water scarcity is also about the quality of available water for essential human needs like drinking and bathing. Only 15% of companies are reporting metrics on discharged pollutants, and just 4% have set targets to reduce them.

High risk of greenwashing on plastic, as companies struggle to back up efforts with data

Despite the comparatively high proportion of companies that provide qualitative evidence of working on plastic reduction (43%), their performance significantly drops regarding whether they are providing quantitative metrics (19%) to back these up, and even more so for whether they have a quantitative, time-bound targets (7%) to reduce plastic use and waste.

Increasing board accountability is vital: more leadership needed at the top

While 66% of companies assign sustainability oversight to their boards, only 2% of companies have boards that can demonstrate they have the relevant expertise on topics like biodiversity or climate. It is apparent that companies that demonstrate robust corporate governance score significantly better on other sustainability issues. To enable impact, companies should prioritise developing a sustainability strategy that covers nature, supported by concrete high-level responsibility and accountability for delivering the strategy.

Irish-based companies can start by joining Business For Biodiversity Ireland and getting started on our Roadmap to Nature Positive which will enable your organisation to build a strong biodiversity strategy.

You can visit a Nature Benchmark FAQ here to find out more.

Read the Nature Benchmark HERE.

Join the BFBI Nature Strategy Accelerator Programme HERE.

Want a deeper understanding of your business’ impacts and dependencies on nature? Wondering where to start with nature-related disclosures? Lost in a fog of TNFD / GRI / EFRAG / CRSD alphabet soup? Keen to develop a roadmap to Nature Positive for your business but don’t know where to start?

Business For Biodiversity Ireland is participating in the development of a new module with Trinity College Dublin’s Dr Catherine Farrell titled ‘The Business of Nature Positive’ and are inviting businesses who would be interested and willing to:

  • participate in Trinity Business School undergraduate / student-led research to trial the application of nature-related reporting frameworks and tools, and
  • explore ways to develop a roadmap to Nature Positive.

Businesses rely on many aspects of nature and climate to carry out day-to-day business. Recognising these dependencies, as well as the impacts of business on nature, new reporting requirements under the new EU Corporate Social and Responsibility Directive (CSRD), will fast become a reality for Irish businesses.

In response to the need to build capacity for present and future business needs, Trinity Business School is developing this module to be delivered to 4th year undergraduates in the 2024/2025 academic year and facilitate learning in how to apply and communicate relevant nature-related reporting and disclosure frameworks for businesses, helping to identify steps to nature positive and through these processes assist businesses to integrate nature into decision making.

We expect the input from the business to be by a nominated staff member / sustainability business champion working directly with the TCD students. We expect the work to involve at minimum approximately 8-10 hours in total over a period of 4 months (largely between December and mid-April 2025 – download a breakdown of time and commitment expected via the PDF at the end of the article.)

As a participating business, through engagement in this process, you will have opportunities to:

  • Benefit by receiving bespoke support in kickstarting scoping for a materiality assessment for your business
  • Assistance in taking the first steps in identifying data available / potential data needs for nature related reporting
  • Develop a deeper understanding of your business’ impacts and dependencies on nature,
  • Begin the thought process as to how to develop a roadmap for nature positive for your
    business, and
  • Trial approaches / identify opportunities for communicating nature related issues to
    stakeholders (internal and external).

Once we have an overview of interested businesses (small or large, of any sector), the module coordinator will follow up with a questionnaire to determine your suitability in terms of logistics and availability.

NB: Please submit an expression of interest form HERE.

This call for Expressions of Interest will close in early July.

 

Our Roadmap to Nature Positive will help you set the right foundations for reporting your nature-related impacts and dependencies under new regulations – it’s also useful if you are considering reporting these voluntarily.

Regardless of current legal obligations, there is a responsibility for all organisations, no matter their size, to understand their impacts and dependencies on nature and take measures to halt and reverse these. Business as usual is not an option, given the decline in global biodiversity and the interlinked climate crisis, the effects of which are already being felt on human health and society, as well as economically. 

First off, you need to know your obligations on nature disclosures. Within the Roadmap – available to BFBI members when you sign up and log in to the Members Area of our site – we look at reporting for different business types and scales. We also outline the relationship between EU Taxonomy and the Corporate Sustainability Reporting Directive (CSRD).

Goal 3 provides information on your legal obligations, in particular if your business falls under the scope of CSRD; and if/when your business needs to start reporting. There is a different timeline for companies of various scales, starting in 2024 for certain companies. For businesses that do not currently fall under the scope of CSRD, we outline how it may relate to your business down the line.

Considering the value chain

Many businesses that are not within the scope of CSRD are still part of the value chain (aka Scope 3) of larger organisations. These larger organisations may well request Environmental, Social and Governance (ESG) information from their value chain members – and organisations who are not ready for this may find that they lose out when it comes to larger organisations making supplier choices.

Once you know your obligations under the new regulations, the next step will be to explore the reporting standards to find the best fit for your business. Members can check out our Guidance A3.2 on Standardising Reports. Standardised reporting helps organisations increase transparency and communicate their sustainability initiatives.

We’ll give you an overview of the reporting standards that are internationally recognised and aligned with each other with explainers on how all the emerging different policies, frameworks and standards are linked.

Already feeling the overwhelm? Take a breath and have a look at our easy-to-read member guidance documents to give yourself a basic understanding. You’re not expected to be an expert right away and the Platform is here to help. If you have questions, all members are invited to our quarterly Member’s Forum, and you can upload your questions or comments to the online dashboard so that we can discuss them at our meet-ups.

Register here: https://businessforbiodiversity.ie/register-all/

Business for Biodiversity Ireland offers our members an easy-to-follow Roadmap to Nature Positive –  the Assess Phase covers getting started by making a commitment – and another key step is working out where your business stands within a sectoral and organisational context in order to create a solid biodiversity strategy. To do this, you need to know how to ask the right questions.

BFBI members can access our Business Template which will help map out your business model in terms of inputs, activities and outputs. It has been compiled with our community of practice businesses and cross-referenced with prevailing methodology and standards, such as the Global Reporting Initiative and the TNFD LEAP approach.

The Global Reporting Initiative is an independent, international organisation that provides a global common language to communicate environmental impacts with a suite of standards to help businesses report on various aspects of sustainability across regulatory landscapes.

The BFBI Business Template helps unpack your business model with a series of guiding questions, for example:

– What sector are you active within?
– What type of activities are carried out by your business?
– Where are your activities based geographically?

The template goes on to cover your raw materials, your procurement, your land footprint, your water footprint – with recommended tools to calculate these – as well as, you guessed it, your carbon footprint.

Creating a value-chain map

Then you’ll look through your business and value-chain relationships, with more guiding questions, giving you an opportunity to create a value-chain map. Every business has a value chain – you need to also consider what types of activities are undertaken by those with which you have business relationships?

Think about your sector and theirs – what are the nature challenges at local, regional, and global levels related both to your sector and to that of organisations in your value chain: e.g. deforestation, climate change, water stress, pollution, land use, invasive species, natural resource use?

What are the responsibilities with regards to compliance and regulation? These steps on the Roadmap will allow you to create high-level overviews to identify topics material to your business when it comes to new and existing reporting regulations.

This process must be revisited regularly and in consultation with stakeholders and industry experts. The policy landscape is evolving, reflecting the urgency to take action to mitigate risk from the connected biodiversity loss and climate change crises. It is therefore important to be aware of any policy changes that relate to your business, sector and value chain.

The BFBI platform will be on hand with updates – become a member here to access our full Roadmap to Nature Positive.

Next up: Nature Disclosures – knowing your reporting obligations & choosing the right framework

Image credit: Bending the curve of terrestrial biodiversity needs an integrated strategy | Nature

 

Our platform lead Lucy Gaffney has written a blog in conjunction with her upcoming presentation at the Chartered Institute of Ecology and Environmental Management’s upcoming Irish conference: Delivering a Nature Positive Ireland, first published on the CIEEM website.

We are on the brink of the next revolution, the “real” Green Revolution and its emergence signals the end of the ecocidal industrial revolution of the 1800s. For the first time in human history, we are waking up to the notion that healthy ecosystems are the foundation on which we have built our civilisations.

Nature is the great provider. People have become wealthier, we’re living longer and we have the best standard of living that has ever been. But while that curve is on the upswing, there is another curve that is plummeting at an alarming rate – the richness and health of the planet.

We are here because we have burned through the planet’s natural resources with reckless abandon, without assuring that these resources were replenished, without stewardship, without regard to other living beings and indigenous peoples.

But the tide is turning. The business world is waking up to the reality that without investment and stewardship of the natural world, their business is at risk, the economy is at risk and society, as we know it, is at risk.

First Steps
So how can businesses realistically start mobilising for nature? The truth is, that nature is the bigger picture. Our destruction of the natural world undermines the planet’s ability to process excess carbon and greenhouse gases, and our excessive greenhouse gas emissions which cause planetary warming and ocean acidification, perpetuates the loss of biodiversity and interrupts natural cycles.

The first step is really understanding that climate change and biodiversity are two sides of the same coin and absolutely need to be tackled together.

Climate or Biodiversity?
The Intergovernmental Science Policy Platform for Biodiversity and Ecosystem Services (IPBES) has identified five key industrial drivers of biodiversity loss.

– Pollution; solid, liquid and gaseous waste
– Invasive Species; non-native plant and animal species
– Ecosystem conversion; changing how we use our land and seas
– Climate Change; planetary warming, forest fires, ocean acidification
– Exploitation of natural resources


Many businesses are already planning or implementing sustainability projects and many of those projects are less to do with climate change and more to do with nature. Take single use plastics for example, yes they are made from petrochemicals, but the main reason we are ditching single-use plastics is to reduce pollution, a driver of biodiversity loss. There are of course cross-cutting benefits to eliminating single-use plastic, but pollution reduction is the most impactful.

Water stewardship is another corporate initiative that has a greater positive impact on biodiversity than climate change. Conserving water in areas that experience water stress has a high impact, not just on local flora and fauna but also on communities. As the summer temperatures rise, water stress is becoming a bigger issue, even in countries like Ireland. How many companies or services would grind to a halt if there was a prolonged drought?

Reframing our sustainability portfolio through the biodiversity lens might uncover that we are doing more for biodiversity than we first imagined.

Impacts and Dependencies
Every business depends on nature, whether directly or through its value chain. Understanding these dependencies on nature has the potential to expose hidden risks to your business and its future continuity.

Similarly, every organisation has an ecological impact. Whether it be through pollution, greenhouse gas emissions or buying palm oil for your products, some part of the natural world is being degraded. In order to develop a meaningful biodiversity strategy, businesses must understand these impacts and dependencies. There is no point in planting trees or wildflowers to tick the biodiversity action box, if a core activity in your business is responsible for deforestation somewhere else. That’s not nature positive.

There is a multitude of tools and frameworks available to help businesses, particularly corporates, understand their impacts but they can be quite technical and overwhelming for a lay person to navigate. In simple terms, a business could list core activities and explore how those activities might put pressure on those previously mentioned “drivers of biodiversity loss”. How can your business reduce that pressure? Through better recycling policies? By understanding where your raw materials come from? It doesn’t have to be complicated, any positive action is better than inaction, but it should be evidence-based.

The Role of the Consumer
It has long been my view that businesses need guidance and regulation to get to grips with these issues. But in parallel, there needs to be a shift in consumer sentiment and purchasing behaviour. We need to act quickly to avoid going over 1.5C in planetary warming and to halt nature loss, and the key to quick action is a change in consumer demand. It is happening, but there is still a lack of understanding of the issues in the mainstream. Do the public understand that buying products with palm oil, palm fat, palm kernels is causing deforestation in a tropical rainforest? Palm fat is in chocolate, peanut butter, stock cubes, most processed food, toothpaste, makeup.. the list goes on!

We need better labelling on products so that we, as consumers, can make more informed decisions and catalyse change from the ground up.

Into the future
In the next decade, “the competitive edge” will be redefined. The next great green revolution is coming and if business doesn’t evolve, then extinction is on the cards.

Lucy will be speaking at the upcoming CIEEM Irish Conference: Delivering a Nature Positive Ireland in Athlone, April 25. Book HERE.

In the Corporate Sustainability Reporting Directive (CSRD), the European Sustainability Reporting Standards (ESRS) E4 standard specifically addresses corporate sustainability relating to biodiversity and ecosystems.

The aim of ESRS E4 is to help businesses understand how they affect nature, positively and negatively, actually and potentially and how to interpret the results of corporate biodiversity action. Lucy Gaffney explains more…

Key questions for your business

  • How does the business contribute to achieving the objectives of the European Green Deal, the Sustainable Development Goals (SDGs) and the Global Biodiversity Framework (GBF)?
  • Can the business evolve its operations so that it no longer contributes to ecological damage?
  • Does the business understand the operational risks posed by deteriorating ecosystems and the potential opportunities that could be associated with the protection and conservation of nature?
  • How is the business managing those risks?

ESRS E4 specifies the information that must be disclosed about biodiversity and ecosystems across all sectors. Specific sectoral disclosure will be defined by ESRS SEC 1 Sector Classification and the CSRD requirements are expected to be in place for financial years beginning on or after 1 January 2024 by large publicly traded entities that have more than 500 employees at the same time (i.e. entities already subject to the Non-Financial Reporting Directive) and by 2025 for other large companies. Small and medium-sized enterprises (SMEs) will also be subject to a reporting obligation starting in 2027.

Disclosure Requirements

  1. ESRS E4 requires that a business disclose its strategic plan to ensure that their business model will become compatible with the transition to achieve no net loss of biodiversity by 2030, net gain from 2030 and full recovery by 2050. This disclosure will need to include plans to address nature loss within the value chain as well as confirmation that the strategy has been approved by the relevant management boards. 
  2. Each business will be required to disclose all policies relating to biodiversity and ecosystems. This is to ensure that businesses actually have policies to protect nature and how these policies are monitored and managed.
  3. Businesses will have to disclose plans and methodology that will support their biodiversity policies.
  4. A disclosure on the social consequences of nature loss will also be required. This includes, for example, information related to fair and equitable benefit sharing arising from the utilisation of genetic resources and traditional knowledge.
  5. Disclosures will have to include information on how business policies are connected and aligned with global goals and agreements, such as the SDGs, the GBF and the European Green Deal.
  6. Targets will form part of the disclosure mandate. Businesses will be required to disclose the biodiversity and ecosystem-related targets that it has adopted, including timelines, milestones, respect to ecological thresholds and planetary boundaries. In addition, these targets must be supported by the business management board and in alignment with and informed by guidelines set out by the Convention on Biological Diversity (CBD) and Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES).
  7. Businesses must be transparent and disclose all biodiversity actions, action plans and allocation of resources that will enable the organisation to meet its policy objectives. 
  8. The standard requires the disclosure of pressure metrics. Does the business understand how its activities put additional pressure on the drivers of biodiversity loss? These include, but are not limited to pollution, invasive species, land use, climate change and exploitation of natural resources.
  9. Businesses must also disclose impact metrics related to geography or raw materials. This may include impacts on species and their extinction risk or impacts on ecosystems, reporting on extent, condition and function.
  10. Businesses will be required to disclose response metrics to understand how the business has tried to minimise, rehabilitate or restore nature in areas where it has had a significant negative impact.
  11. There is an optional disclosure on biodiversity-friendly consumption and production metrics which will provide insights into its consumption and production which may be considered biodiversity-friendly.
  12. The Taxonomy Regulation requires businesses to disclose information on the proportion of turnover, capital expenditure and operating expenditure that qualify as environmentally sustainable.
  13. Another voluntary disclosure is around biodiversity offsets, where the business may disclose actions, development and financing of biodiversity projects. 
  14. A disclosure on potential financial effects of nature-related risks and opportunities will be required.

This is an evolving space and many businesses will need to implement this as a first step. If a business cannot make these disclosures because strategies have not been developed or adopted, they will need to provide timeframes around when an appropriate strategy will be developed and adopted.

One of the chief aims of BFBI is to guide our businesses through upcoming policy changes around nature-related disclosures.

This article was also published in investESG Insight.