Biodiversity (E4) under CSRD & ESRS: Is it material?
As companies work towards meeting the new European Sustainability Reporting Standards (ESRS), the principle of double materiality—considering both financial impacts and societal/environmental effects—is key. A pressing question for many businesses is whether biodiversity (E4) will be deemed material in their reporting.
With the first Corporate Sustainability Reporting Directive (CSRD) deadlines approaching, early insights from recent studies reveal a growing focus on biodiversity. According to research by Denis Frischmann:
- 53% of DAX-40 companies plan to address biodiversity in their 2024 sustainability reports, according to the Accounting Standards Committee of Germany.
- 55% of early ESRS adopters view biodiversity (E4) as material, based on research from the University of Cologne.
- 63% of partially aligned reports examined by Cooley LLP identified biodiversity as a material issue.
ESRS is material. Just as climate is. The trend is becoming clear: biodiversity is emerging as a critical focus for companies under the ESRS framework. The Stockholm Resiliency Center has generated a visualisation of the planetary boundaries. Take a look at the planetary boundary on the biosphere integrity.
Businesses are increasingly recognizing not only their environmental impact but also their financial reliance on natural ecosystems. Just as climate is undeniably material, so too is biodiversity, underscoring the need for proactive efforts to protect and restore our planet’s ecosystems.
Sources:
Müller/Valkyser (2024), CSRD Materiality Analysis – Early Adopter Insights
DRSC (2024), Kurzumfrage des DRSC zum Stand der Wesentlichkeitsanalyse in den DAX40-Unternehmen
Cooley (2024), Insights From Early Adopters of EU’s Corporate Sustainability Reporting Directive
Stockholm Resiliency Center, Planetary Boundaries
