Let’s talk
.jpg)
Last week, the European Financial Reporting Advisory Group (EFRAG) released updated exposure drafts of the European Sustainability Reporting Standards (ESRS), including a revised biodiversity standard (ESRS E4).
These revisions were mandated by the European Commission as part of the ‘Omnibus’ proposal, which aims to reduce the administrative burden on businesses while maintaining robust sustainability reporting.
The biodiversity standard (ESRS E4) is one of 12 new drafts and sets out mandatory disclosure requirements (DRs) for companies relating to biodiversity and ecosystems. It covers what companies must report on - including transition plans, policies, actions, targets, and metrics - and how they should structure these disclosures through supporting Application Requirements (ARs).
The biodiversity standard applies to all businesses in scope of CSRD that determine biodiversity and ecosystems to be material to their impacts, risks, or opportunities. If your company deems biodiversity not material through its double materiality assessment, you may omit disclosures. However, you must explicitly state this and provide a justification.If your organisation has identified biodiversity as material, then all relevant disclosure requirements become mandatory.
The new Biodiversity Standard includes five disclosure requirements and is accompanied by corresponding guidance “Application Requirements”.
Companies must disclose their biodiversity-related transition plan, aligned (if applicable) with global goals like the Kunming-Montreal Global Biodiversity Framework.
Companies must disclose their policies relating to biodiversity and ecosystems including the traceability of its products and the components/raw materials that have actual or potential negative impacts (both upstream and downstream).
Companies must disclose the actions they are taking to prevent, mitigate, or remediate their negative impacts on biodiversity alongside the resources allocated to these.
Companies should disclose the targets they have relating to biodiversity and how these align to relevant global goals and frameworks where applicable (e.g. the Kunming-Montreal Global Biodiversity Framework).
Companies should disclose the metrics used to understand their impacts, risks and opportunities on nature including where applicable their material direct operations, the sensitive areas affected and by which activity.
A public consultation is now open which will run from July 31 st to September 29 th 2025. Multiple stakeholders have been invited to respond including preparers, auditors, civil society, investors, and national authorities. EFRAG will deliver its final text to the European Commission in November.
Whilst revisions and simplifications may have slowed momentum, the fundamentals of the Biodiversity Standard and our advice remains the same. Get Started! B usinesses in scope will need to understand how their operations interact with biodiversity and ecosystems, and how they are reporting and responding to these. If your business is not doing this, value is being lost at a time where our economies are nearing critical tipping points.
It’s easy to get bogged down in the technicalities. But at its core, this is about understanding your relationship with nature and taking action in ways that create long-term business and societal value. Importantly, this doesn’t necessarily require large budgets or signifi cant resource commitments. It requires clarity, focus, and a willingness to act.
