ESRS E4 Biodiversity and Ecosystems

ESRS E4 (Biodiversity and Ecosystems) is one of the topical European Sustainability Reporting Standards introduced as binding requirements under the Corporate Sustainability Reporting Directive (CSRD) through Delegated Regulation (EU) 2023/2772. The standard obliges reporting companies to disclose transparently how their business activities affect species diversity, terrestrial, freshwater and marine ecosystems, and the services these ecosystems provide, as well as the financial risks and opportunities that arise from these dependencies.

In terms of content, ESRS E4 first requires disclosures on strategy and business model with regard to nature-related dependencies and impacts, along with a transition plan addressing alignment with the global biodiversity framework (Kunming-Montreal Global Biodiversity Framework). In addition, companies must disclose policies, actions and targets on biodiversity and ecosystems, for example to prevent habitat degradation, reduce land take and soil sealing, protect species threatened by invasive species, and restore degraded ecosystems. The mitigation hierarchy (avoid, minimise, restore, offset) provides the methodological framework.

Finally, ESRS E4 calls for quantitative metrics, including information on sites located in or near biodiversity-sensitive areas, on land-use change, and on the condition of species and ecosystems. Which of these data points actually have to be reported follows from the double materiality assessment: E4 only becomes mandatory where biodiversity and ecosystems are material to the company from an impact or financial perspective. Because many value chains depend heavily on intact nature, the standard is highly relevant for sectors such as agriculture, food, construction, mining and energy.