Climate reporting has become central to corporate sustainability, but the next phase of ESG compliance is expanding beyond carbon. Nature and biodiversity are moving into focus as regulators, investors and companies recognize that business activity depends on healthy ecosystems and natural resources.
From climate risk to nature-related risk
For many organizations, climate compliance has traditionally centered on greenhouse-gas emissions, energy use, transition plans and climate-related financial risks.
Nature-related reporting introduces a broader set of considerations: where operations and supply chains interact with ecosystems, how activities affect biodiversity, and which dependencies could create future business risks.
Unlike carbon, which can be expressed in tones of CO₂e, biodiversity involves different ecosystems, species and geographic conditions, making data collection and assessment more complex and location-specific.
Europe is raising the bar
Europe is driving this shift through the European Sustainability Reporting Standards, specifically ESRS E4 on biodiversity and ecosystems. The standard addresses material impacts, dependencies, risks and opportunities related to biodiversity and ecosystems, including drivers of biodiversity loss, species, habitats, ecosystem condition and ecosystem services.
Following the 2025–2026 ESRS simplification process, the biodiversity transition-plan disclosure under ESRS E4 is now conditional. Companies disclose the key features of a biodiversity and ecosystems transition plan only where they have such a plan in place and have made its key features public. Similarly, biodiversity-related policies, actions and targets are disclosed where they exist and are relevant to material impacts.
In September 2025, TNFD submitted technical input to EFRAG proposing the consolidation of ESRS E2–E5 into a single integrated E2 nature standard. The proposal aims to streamline nature-related reporting while maintaining a holistic view of dependencies, impacts, risks and opportunities and improving comparability across reporting frameworks.
Turning compliance into business resilience
Compliance should not be the only reason companies address biodiversity. Nature-related risks can affect costs, resource availability, supply-chain stability, market access and reputation.
A food company exposed to water stress, for example, may face production and sourcing challenges. A manufacturer dependent on natural resources may encounter higher costs if those resources become scarce or ecosystems deteriorate. Identifying these dependencies early can help companies develop alternative sourcing strategies, improve resource efficiency and strengthen resilience.
Businesses can also move from risk assessment to positive action. Restoring ecosystems, reducing water consumption, improving land-use practices, adopting responsible sourcing policies and protecting biodiversity across facilities and supply chains can become part of broader sustainability and resilience strategies.
Building credible nature strategies
The next challenge is implementation. Companies need reliable location-based data, clear responsibilities, consistent methodologies and measurable targets. Nature-related commitments should be supported by governance and evidence rather than broad sustainability statements.
Many organizations are using the TNFD’s LEAP approach—Locate, Evaluate, Assess and Prepare—to structure nature-related assessments and connect findings with governance, targets and actions. For example, a consumer goods company sourcing palm oil can use the approach to map its supply chain and locations, identify areas of biodiversity sensitivity, assess dependencies and nature-related risks, and develop traceability and zero-conversion targets supported by appropriate verification.
Globally, ISO 17298:2025 provides requirements and guidance for integrating biodiversity considerations into organizational strategy and operations. It can help organizations identify and assess biodiversity-related dependencies and impacts and develop structured action plans, with consideration of the goals and targets of the Kunming–Montreal Global Biodiversity Framework.
For ESG leaders, the priority is to connect nature strategy with business decision-making. Procurement, risk management, finance, operations and sustainability teams need a shared understanding of how dependencies on ecosystems and impacts on nature can affect resilience, costs, supply chains and long-term business performance.
Nature and biodiversity at ESG Next Barcelona
Nature and biodiversity will take center stage at the ESGNext Awards & Conference, Barcelona, 25–27 May 2027,as companies move beyond disclosure under ESRS E4 and TNFD toward measurable, action-oriented strategies. For ESG leaders, the focus is on translating reporting requirements into practical governance, site-level assessments, credible targets and assurance-ready data that strengthen long-term business resilience.