Key differences between the most prominent biodiversity disclosure initiatives have been examined in a report published by the EU Business & Biodiversity (B&B) Platform.

Six disclosure initiatives – including those from Sustainable Finance Disclosure Regulation (SFDR) and Taskforce on Nature-related Financial Disclosures (TNFD) – were analysed in the EU platform report, which was written by consulting firm Arcadis.

The report aims to “clarify the details of where standards (ESRS, GRI) and risk management and disclosure frameworks (TNFD) are converging, or diverging, from each other”.

The biodiversity standards of European Sustainability Reporting Standard (ESRS), the Global Reporting Initiative (GRI) 101, and TNFD are “well aligned on most of the selected characteristics”, the report said.

“However, differences remain,” it added after having examined three regulatory and three voluntary initiatives:

Source: EU B&B Platform

Alignment of disclosures is becoming increasingly important as it affects comparability of biodiversity data. Better alignment means more transparency.

Large EU companies will have to publicly report on their activities under ESRS between 2025 and 2029, depending on their type, while organisations around the world are increasingly adopting the voluntary TNFD recommendations.

Bettina Doeser, head of natural capital and ecosystem health at the Commission’s environment directorate, said the amount of information available on the topic could be a bit overwhelming.

The differences between schemes, and what makes one more suitable for specific companies, have not always been evident, she said during a webinar.

This month, a study said the lack of a common approach to biodiversity reporting among emerging standards for corporate disclosures could hamper comparability of companies’ impacts on nature.

GRI DIFFERENCES

The 113-page report outlined how some of the differences could lead to “large efforts” for organisations in moving between different initiatives.

Moving from GRI to ESRS disclosures could be a big effort across approaches to materiality, transition plans, dependencies, and financial effects, the report found.

The report stressed that, due to the difficulty in separating the characteristics of each initiative, its summary conclusions “should not be considered as mathematical scores that can be summed up into overall scores for the different disclosure initiatives”.

EFRAG – which oversees ESRS  – TNFD, and GRI are organised around the same four disclosure pillars: governance and strategy, risk and impact management, metrics, and targets, said Johan Lammerant, the lead author of the report who spoke at the same webinar.

However, GRI has a “major difference” as it focuses on “not risk and impact management but only impact management”, said Lammerant, who is also lead expert in natural capital at Arcadis.

“GRI in general has a focus on impacts, and to a minor extent also dependencies, but it does not focus on the risks and opportunities. That’s important to understand,” he said.

Harold Pauwels, director of standards at GRI, said his organisation has been focused on impact for over 20 years “because that’s difficult enough”, though it also works with the International Sustainability Standards Board on dependencies.

Pauwels emphasised GRI’s collaboration with standard setters, regulators, and national authorities to ensure aligned terminology.

TRANSITION PLANS

The general alignment of EFRAG, TNFD, and GRI was “absolutely good news”, Lammerant said. “However, as long as there are different initiatives, there will always be differences.”

All three frameworks require organisations to investigate their resilience to nature-related changes, and to achieve alignment of their business model with the vision of the Kunming-Montreal Global Biodiversity Framework (GBF), Lammerant said.

However, they also have some important differences in transition planning. “The disclosure of transition plans according to ESRS is not mandatory,” he said. “While TNFD recommends disclosure of the transition plans, it’s simply a condition for compliance to TNFD recommendations. And for GRI it’s an option.”

Turning to materiality, he noted how ESRS and GRI referred to TNFD’s Locate, Evaluate, Assess, and Prepare (LEAP) approach, proving alignment efforts.

By Thomas Cox – t.cox@carbon-pulse.com

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