Most companies preparing for CSRD have spent the bulk of their effort on climate. ESRS E4, the standard covering biodiversity and ecosystems, is proving harder to meet in practice, and the standard where implementation gaps are widest.

ESRS E4 applies to companies that identify material biodiversity impacts, risks or opportunities through their double materiality assessment. The bar for ruling out materiality is higher than most companies assume. For any business with significant land use, freshwater use, or agricultural or chemical inputs in its value chain, a low-materiality conclusion is difficult to justify. And honestly, every business has an impact or dependency on nature.

For companies where biodiversity is material, the standard requires disclosure across four areas:

• Policies and commitments. Describe any policies managing biodiversity impacts, and whether the company has commitments on no net loss, biodiversity net gain, or nature-positive goals.
• Targets. Measurable, time-bound targets that reference specific ecosystems or locations where relevant. Generic commitments to “protect biodiversity” without defined scope won’t meet the standard.
• Actions and resources. What the company is doing, including Biodiversity and Ecosystem Action Plans, what resources are allocated, and whether actions are on track.
• Metrics. This is where E4 becomes demanding. Required disclosures include: Area of sites in or adjacent to biodiversity-sensitive areas, area under conservation or restoration management, changes in ecosystem extent and condition, and pressures on biodiversity: land use, water use, pollution, invasive species, climate

Most companies have not historically collected data at this level of granularity. Land use change at site or supplier level, water consumption disaggregated by watershed, chemical inputs and biodiversity effects: these are not standard outputs from existing reporting systems.

Where the gaps are showing up

The double materiality assessment. Many companies are scoring biodiversity at a high level of abstraction, using sector averages rather than site-specific analysis. The result is a materiality conclusion that may not survive scrutiny as auditors become more familiar with the standard.

Location-specificity. Unlike carbon, biodiversity impacts are inherently local. A site adjacent to a protected wetland carries different exposure than an identical facility in an industrial zone. ESRS E4 expects that distinction to be reflected in disclosures, which means companies need actual spatial data on where they operate and what ecosystems they sit alongside.

Targets. Many companies are declaring alignment with the Kunming-Montreal Global Biodiversity Framework’s 30×30 target without translating that into company-level commitments that are measurable and time-bound. The gap between aspirational alignment and reportable target-setting is significant.

A note on Omnibus

The EU Sustainability Omnibus proposals narrowed the scope of mandatory CSRD reporting. But companies that remain in scope face substantially the same substantive requirements under E4, and companies responding to supply chain pressure from in-scope businesses will encounter the same questions regardless.

Where to start?

Begin with the double materiality assessment and take it seriously. From there: map material locations using spatial data, identify key ecosystem dependencies and impacts per site or supplier tier, set specific targets against that baseline, and assess what metrics you can realistically collect now.

CSRD biodiversity reporting can’t be handled by extending an emissions reporting process. It requires different data, different methodologies, and different conversations inside the business. The companies that understand that now will be in better shape when the first assurance review arrives.