Biodiversity and Ecosystem Services

Biodiversity refers to the variety of life on Earth — ecosystems, species, and genetic diversity. Ecosystem services are the benefits that functioning ecosystems provide to humans and society (e.g., pollination, water purification, climate regulation, soil fertility). In ESG reporting, ESRS E4 (Biodiversity and Ecosystems) under the CSRD requires companies to disclose impacts, dependencies, risks, and opportunities related to biodiversity and ecosystems. The TNFD (Taskforce on Nature-related Financial Disclosures) framework provides voluntary guidance for nature-related financial disclosures, which ISSB is building on.

ESRS E4 (Biodiversity and Ecosystems), Commission Delegated Regulation (EU) 2023/2772; TNFD Recommendations v1.0 (September 2023); Kunming-Montreal Global Biodiversity Framework (CBD COP15, December 2022).

For manufacturers with significant land use, water consumption, or supply chains in sensitive ecosystems (agriculture, mining, forestry, fisheries), ESRS E4 requires a location-specific assessment of biodiversity impacts and dependencies. The TNFD framework, increasingly used by investors and financiers, recommends LEAP analysis (Locate, Evaluate, Assess, Prepare) for nature-related risks. Under Omnibus I, ESRS E4 may become subject to materiality assessment rather than mandatory disclosure for all Wave 1 reporters.