Businesses and organizations support ambitious EU reporting standards to scale and speed up nature action
In a letter to the European Commission, 38 businesses and organizations support the need to maintain the timeline, integrity, and ambition of the implementation of the Corporate Sustainability Reporting Directive (CSRD) and corresponding European Sustainability Reporting Standards (ESRS) Set 1. These new set of standards represent the most advanced sustainability reporting framework globally and have the potential to significantly raise the bar for corporate action and disclosure on nature.
We need policy ambition and mandatory requirements to scale and speed up business action.
At the UN Convention on Biological Diversity COP15 in Montreal, governments committed – in Target 15 of the Global Biodiversity Framework – to require all large businesses and financial institutions to assess and disclose their risks, impacts, and dependencies on nature, through their operations, supply and value chains, and portfolios. Such an ambitious outcome was achieved because of the support from leaders such as the EU and reinforced by more than 400 companies, with combined revenues of $2 trillion calling to make assessment and disclosure on nature mandatory. The ESRS set 1 would provide a major contribution globally to achieving Target 15.
2. We need to act with urgency to address the nature crisis
While reporting in line with the ESRS will require focus and could be challenging, ignoring the biodiversity crisis and the fundamental impacts and dependencies businesses have on nature and continuing business-as-usual will bring much greater challenges and costs. The EU and all Parties to the Convention on Biological Diversity who adopted the Kunming-Montreal agreement, cannot only be focused on short-term gains, at the risk of destroying economic value over the medium and long term. This is why it is critical to maintain an ambitious timeline for progress, delivery, and implementation of the ESRS Set 1 if we are to collectively reach the mission of the Kunming-Montreal Agreement to halt and reverse nature loss by 2030.
3. We need standards that are practical and interoperable
No standards are perfect but they should evolve faster to be practical, interoperable and to consider the lasted best practice in line with science. They should also be, as much as feasible, aligned with each other to ensure easy use.
The draft European Sustainability Reporting Standards (ESRS) are aligned with the Global Reporting Initiative’s (GRI) Reporting Standards and with the latest recommendations by the Task Force on Nature-related Financial Disclosures.
The European Financial Reporting Advisory Group (EFRAG) standards will contribute to the International Sustainability Standards Board (ISSB)’s reporting standards, which are expected to incorporate biodiversity, ecosystem and ecosystem services, building on the Taskforce on Nature-related Financial Disclosure’s guidance and other existing nature-related standards and disclosures. The ISSB also references the use of other standards like the ESRS in the absence of ISSB-standards.
The proposed disclosure requirements and phasing depending on the size and location of companies is designed to facilitate implementation. Read this FAQ.
What next?
Following a historic outcome at the UN Biodiversity COP15, there is increasing interest, engagement and momentum from businesses in ensuring the successful adoption and implementation of disclosure standards on nature. Evidence over 20 years from CDP has shown that business disclosure generates further action to reduce impacts.
Together with our partners, we will help consult businesses and organizations as they input into the ESRS consultation as well as the ISSB's Request for Information Consultation.