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By Dr. Constantijn van Aartsen. The interim draft standards for the CSRD require companies to disclose biodiversity risks, opportunities, dependencies, and impacts. This repeated terminology, suggests that influential players around the world are aligning on these four terms as an emerging standard for global biodiversity reporting.

There is good reason that biodiversity loss has become an important topic on the global agenda. The WWF estimates that wildlife population sizes have decreased by 60% globally between 1970 and 2014. And UN Secretary-General António Guterres recently commented that “We are treating nature like a toilet” which, since we are dependent on the living world, amounts to “committing suicide by proxy.” Given this context, it is not unexpected that we are seeing an increase in biodiversity-related state and business activities.

Internationally, the most recent and prominent of these has been the December 2022 (COP15) meeting of the parties to the Convention on Biological Diversity (CBD), at which 188 states adopted four goals and 23 targets for 2030. While legally non-binding, the agreement includes a commitment to protect 30% of global land and water, to reduce subsidies for biodiversity-harming economic activities by $500 billion per year, and to provide at least $200 billion a year in funding for biodiversity-related activities. It also includes a reporting target for “large and transnational companies and financial institutions to monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity through their operations, supply and value chains and portfolios” [my emphasis].

It is significant that the terminology of this CBD standard is closely aligned with reporting standards which are under development by the Taskforce for Nature-Related Financial Disclosure (TNFD), and with the interim draft standards of the EU’s Corporate Sustainability Reporting Directive (CSRD).

The aim of the TNFD standards is to support “a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.” They are voluntary but highly influential since TNFD members represent over $20 trillion in global assets. The current draft version of the standards (beta 0.3; final expected September 2023) asks companies to disclose material information on biodiversity risks, opportunities, dependencies, and impacts. Its guidance includes a raft of information on definitions, data analysis, and modelling, and even a full-fledged risk management framework. It is currently being tested by dozens of companies and financial institutions around the world.

The situation with the CSRD needs more explanation. It has been adopted as a framework Directive to replace the Non-Financial Reported Directive (NFRD), and already entered into force on 5 January 2023. Its detailed reporting standards have not, however, been adopted yet. Instead, their development has been outsourced to EFRAG and, once approved, will be adopted by the Commission through delegated acts.

The CSRD establishes that the first set of draft standards, which covers sustainability reporting in general, will be adopted by June 2023. A second set of standards, with sector-specific requirements, will be adopted by June 2024. In terms of implementation, around 11,000 companies that are now covered by the NFRD will be required to report in accordance with the new CSRD standards from 2025 onwards (over the 2024 period). Other companies that fall under the expanded scope of the CSRD, a total of 50,000, will need to report from 2026 onwards over the previous year.

Importantly, the interim draft standards for the CSRD also require companies to disclose biodiversity risks, opportunities, dependencies, and impacts. This repeated terminology, evident also in the CBD and TNFD, suggests that influential players around the world are aligning on these four terms as an emerging standard for global biodiversity reporting.

Even though the emerging standard will only apply to (some) large EU companies in 2025, it is still relevant to ask what companies are doing now and how much they will need to improve. With this aim in mind, I examined the biodiversity reporting of 60 Dutch companies listed on the Amsterdam Stock Exchange. Of these companies, 34 firms (57%) refer to biodiversity-related activities in their 2021 annual report. Nineteen of them (32%) recognise biodiversity as a material topic, and 20 (33%) are strategically engaged with CSR in terms of policies and large-scale projects.

If we look at the four terms of the emerging standard, then we see that biodiversity is identified as a risk by 11 firms (18%), though only three (5%) of them see it as a separate risk. Eight companies (13%) make a generic statement about their dependence on biodiversity, but none of them explain this dependence in detail. Twelve companies (20%) identify biodiversity-related opportunities, and 15 (25%) have done some kind of biodiversity impact assessment. Only seven (12%) firms do these assessments regularly, and only six (10%) disclose more than their high-level conclusions.

In general, we can see that a significant minority of Dutch companies are active on biodiversity. Also clear is that much of this activity is recent, and that the momentum behind biodiversity reporting is increasing rapidly. Nevertheless, it is also evident that not a single company is reporting in alignment with the new, emerging standards for biodiversity reporting. This leaves little room for doubt that Dutch listed companies, and we can imagine their EU and international counterparts, will need to make big, annual strides to comply with upcoming market expectations and legal requirements.


Dr. Constantijn van Aartsen, Postdoc for the Maastricht University Elverding Chair on Sustainable Business, Culture and Corporate Regulation.

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This article features in the ECGI blog collection Biodiversity

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