In response to the Omnibus proposal and scope reductions to the Corporate Sustainability Reporting Directive (CSRD), EFRAG submitted a set of Amended European Sustainability Reporting Standards (ESRS) to the European Commission on December 5th, 2025. These amendments simplify existing requirements, streamlining relevant information and avoiding unnecessary overreporting. 

The Amended ESRS have not been formally adopted yet. A delegated act by the European Commission is still required before the revised standards can enter into force and become legally binding, which is expected by summer of 2026. In practice however, it’s widely expected that the datapoints will remain largely unchanged at this stage, with over 61% being removed by EFRAG, very much in line with the Commission’s simplification mandate. Until that happens however, companies can reassess how the amended requirements apply to their activities and reporting scope. 

ESRS E4 on biodiversity and ecosystems has been significantly revised with the amended ESRS, with several disclosure requirements narrowed or conditionalized. In the current draft, ESRS E4 is more targeted, applying only where biodiversity and ecosystems are identified as a material topic. This update explains what that means in practice and how companies should address ESRS E4 reporting under the amended standards.

What is ESRS E4 and when does it apply? 

ESRS E4 outlines how companies report material impacts, risks and opportunities related to biodiversity and ecosystems under CSRD. It sits in the environmental pillar of ESRS, with other topics such as climate change, pollution and water. 

Biodiversity and ecosystems comprise essential ecosystem services such as pollination, natural water management and climate regulation. Companies depending on or impacting biodiversity often go hand in hand with impacts on business or environmental risks. 

Companies are required to apply ESRS E4 only where biodiversity and ecosystems are identified as material through the double materiality assessment (DMA). If no material impacts, risks or opportunities are identified, no ESRS E4 disclosures are required. 

Whether ESRS E4 applies or not depends on a company’s activities, locations and value chain exposure. In many cases, proximity to biodiversity-rich areas is more indicative of materiality than a sector classification.

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What changed in ESRS E4 after Omnibus: scope, materiality, disclosures

The amended ESRS E4 reflects a broader simplification effort across all standards. Several of the changes are relevant to the biodiversity datapoints. 

First, the number of mandatory datapoints have been reduced. The amended ESRS places stronger emphasis on materiality as a filter, rather than long lists with metrics. 

Second, disclosure of a biodiversity transition plan is now conditional. Companies only have to disclose a transition plan for ESRS E4 if the plan already exists, or if key elements of the plan have been publicized. ESRS no longer demands a biodiversity transition plan for reporting. 

Third, metrics were consolidated around location-based impacts. ESRS E4 now prioritizes clear disclosures about where material impacts occur, which activities are involved and whether biodiversity-sensitive areas are affected. 

Fourth, the amended standards are outlined more clearly. Biodiversity-sensitive areas are defined, and the “area of influence” was introduced to assess whether a site is considered near a biodiversity hotspot. Aggregation across sites is now acceptable when it improves clarity and aligns with ESRS principles. 

Together, these changes aim to simplify the reporting process and make biodiversity disclosures more meaningful and useful for decision-making.

Biodiversity materiality under the amended ESRS E4 

Under the amended ESRS, biodiversity materiality is instrumentalized for decisions.Materiality can be assessed at topic level or sub-topic level. ESRS E4 distinguishes between several closely linked aspects of biodiversity, including drivers of biodiversity change. A company can conclude that one aspect of biodiversity is material while another is not. Reporting can then focus only on that area. 

It is perfectly acceptable for companies to conclude that biodiversity and ecosystems are not material. It is important to support that conclusion with a solid double materiality assessment. 

In general, biodiversity is more likely to be material for companies involved in land use change, extraction, agriculture, forestry, infrastructure development or other activities with a direct environmental footprint. Companies operating in close proximity to biodiversity hotspots may also have a higher likelihood of identifying materiality due to the impact of their operations.

Although one may be inclined to simplify whether ESRS E4 applies or not based on sectors, these are not decisive on their own. Each company has to identify independently whether ESRS E4 applies to them depending on their activities and locations with the DMA. 

ESRS E4 disclosure requirements

Under the amended standards, ESRS E4 disclosures are explicitly conditional and materiality driven. If a company doesn’t identify biodiversity as a material topic, ESRS E4 doesn’t have to be reported on. When biodiversity and ecosystems are identified as material, ESRS E4 builds on the general disclosure framework set out by ESRS 2. Biodiversity-related disclosures are integrated into existing disclosures, rather than being reported on as a standalone topic. 

General disclosures

• Governance (ESRS 2, Chapter 2): companies describe board oversight and responsibility structures for biodiversity. Where biodiversity is not material, no biodiversity-specific governance disclosure is required.
• Strategy (ESRS 2, Chapter 3) is mainly focused on transition planning. Under ESRS E1 companies are required to disclose a transition plan if it exists or key elements have been made public. The amended ESRS does not require companies to develop a transition plan if they do not have one. 
• Impact, risk and opportunity management (ESRS 2, Chapter 4) is where companies explain biodiversity-related topics and how these are assessed and managed. 

Strategy

Strategy disclosures under ESRS E4 focus on transition planning. Previously, a biodiversity transition plan was a requirement. Following the amendments, companies are only required to disclose a transition plan if there is already a plan in place, or if certain elements of the plan have been made public. The amended ESRS do not require companies to develop a biodiversity transition plan solely for reporting purposes. Where no plan exists, no standalone strategy disclosure is required. 

Disclosure requirement E4-1: Transition plan for biodiversity and ecosystems

• ESRS E4-1 only applies if a biodiversity and ecosystems plan is in place, or if certain elements of the plan have been made public. Companies are not required to develop a plan for ESRS reporting purposes. 
• Where applicable, companies explain how the plan addresses material biodiversity and ecosystem related impacts, linking these with the company’s strategy and business model. 
• Not required for ESRS E4-1: resilience assessments, scenario analysis, stakeholder engagement disclosures. 

Disclosure requirement SBM-3: Material impacts, risks, and opportunities in strategy and business model

• Applies only where biodiversity materiality affects the business model or value chain. 
• Not required: biodiversity strategy, goals or commitments, alignment with sustainability objectives. 

Impact, risk and opportunity management 

Impacts, risks and opportunities related to biodiversity and ecosystems are addressed through the company’s double materiality assessment and general disclosure framework outlined in ESRS 2. ESRS E4 builds upon ESRS 2 by linking material impacts, risks and opportunities to biodiversity and ecosystems. Where biodiversity-related impacts affect local or indigenous communities, disclosures interact with ESRS S3 on affected communities. 

Disclosure requirement ESRS 2 IRO-1: Identification of biodiversity and ecosystem related impacts, risks and opportunities

• Companies explain how material topics were identified and assessed across their operations and value chain. 
  
  • Physical, transition and systemic risks

Disclosure requirement E4-2: Policies related to biodiversity and ecosystems

• Companies disclose policies related to biodiversity only if these policies exist and are relevant to material impacts, risks and opportunities. There is no need to adopt policies for the sake of reporting. 
• Disclosures should explain how existing policies address material biodiversity topics. 

Disclosure requirement E4-3: Actions and resources dedicated to biodiversity and ecosystems

• Companies disclose actions and resources related to biodiversity and ecosystems only where such actions exist and are related to material impacts. 
• Companies describe key actions taken to manage material risks and outline the resources allocated to these activities. 

Metrics and targets 

Metrics used under ESRS E4 emphasize where material impacts occur. Where biodiversity and ecosystems are material, companies disclose which locations in their own operations are linked to material impacts and whether biodiversity-rich areas are impacted. Additional metrics can be chosen depending on what is necessary to track per use-case. 

Disclosure requirement E4-4: Targets related to biodiversity and ecosystems

• Where applicable, companies disclose existing biodiversity and ecosystem targets, explaining how these targets address impacts, risks, dependencies or opportunities identified by the DMA. 
• Not required: establishing new targets or demonstrating alignment with biodiversity frameworks or ecological thresholds. 

Disclosure requirement E4-5: Impact metrics related to biodiversity and ecosystems

• If material, companies disclose metrics that track impacts, with a clear focus on where the impacts occur and which activities are involved. 
• The amended ESRS allows aggregation across sites or regions where this improves clarity and avoids unnecessary details 

Disclosure requirement E4-6: Anticipated financial effects of biodiversity- and ecosystem-related risks and opportunities

• Only applies if material risks have anticipated material financial effects.
• Where applicable, companies disclose anticipated financial effects over short, medium and long term.
• Not required for ESRS E4-6: scenario-based financial modelling, disclosure of immaterial financial effects, quantification where effort is disproportionate. 

Across all disclosure elements, the amended ESRS E4 shifts the focus away from generic and redundant biodiversity reporting, toward clear, location-based information on material impacts and their management. This approach prevents over-reporting, while also ensuring that disclosures are useful for decisions and aligned with the CSRD framework. 

Steps for companies applying ESRS E4

If your company might be in scope for ESRS E4, the amended ESRS encourages a streamlined, location-based approach that keeps reporting aligned with material topics. 

1. Screen your own operations by location and review your supply chain: Companies should identify which sites are located in or near biodiversity-sensitive areas. This assessment should use the concept of the “area of influence”, applying a buffer distance. 

2. Apply the double materiality assessment to biodiversity and ecosystems: materiality can be assessed at topic or sub-topic level. If biodiversity is not material, ESRS E4 is not applicable and no reporting is required. If biodiversity is material, the assessment should document which aspects and why. 

3. Confirm which disclosures are required: transition plans, targets, policies and actions only have to be disclosed if they already exist and where they are relevant to the company’s material biodiversity impacts. You also don’t need to report on the entire ESRS E4, but only on the topics which are material to your operation. 

4. Select metrics based on material impacts and locations: disclosures should explain where material impacts occur, which activities are involved and how impacts are monitored over time. Aggregation across sites is acceptable as long as it improves clarity. 

5. Maintain a clear audit trail: Keep records of data sources, assumptions made, baselines and any estimates which were made. This supports assurance as well as making it easier to update disclosures such as activities, locations or materiality, which may change over time. 

These steps help ensure that your ESRS E4 reporting remains targeted and aligned with the amended ESRS, avoiding unnecessary reporting.

Select the right software for climate change reporting

If your business is set to report on CSRD, tackling the biodiversity and ecosystem topics under ESRS E4, and even just figuring out if the topics are material to your business can feel overwhelming and complex - especially for smaller teams coordinating across systems. 

This is where the right tools can make all the difference.

Sustainability reporting software like Coolset is specifically designed to simplify the process for you and your team. It streamlines data collection and analysis, provides actionable reduction recommendations, and generates reports automatically to accelerate your compliance journey.

Discover how Coolset can fast-track your CSRD compliance by requesting a free demo today.

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