CSRD: why instilling robust nature data into your operations will drive long-term business gains

A recent study of c-suite executives from PwC found that 80% of companies have either adopted new technology to improve their CSRD reporting or plan to do so. Nonetheless, 45% were concerned they still do not have the resources to meet reporting requirements.

CSRD’s biodiversity and ecosystems reporting requirements mark a step change for many businesses – requiring new processes, approaches and metrics. It is no surprise, therefore, that many are struggling to equip themselves accordingly.

Despite the pressure to prepare for this new regulation, the opportunities it presents are becoming ever more apparent. Far from another example of overregulation impacting the competitive nature of EU companies, it brings alignment and transparency.

The CSRD’s new disclosure rules are designed to produce standardized, reliable, and consistent ESG data to help channel investment towards meaningful sustainability objectives. It will require companies that operate – or work with – EU companies to treat their sustainability reporting with the same rigour as their financials.

Karel Lannoo, General Manager of the European Capital Markets Institute, sees this as a huge opportunity: “it allows well-prepared and sustainable companies to scale up…. will make supply chains more visible to interested parties… setting ambition and providing new opportunities over time for European companies.”

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Economic reliance on natural ecosystems

With half of global GDP – or $58 trillion – reliant on nature, the argument for protecting and restoring our natural capital is crystal clear.

The condition of natural ecosystems has decreased by an average of 47% from baseline estimates according to a major report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES).

With the rush of regulation and the growing existential threats to supply chains, the race to understand, measure and monitor nature is rapidly rising up the board room agenda.

Meanwhile, with independent assurance of sustainability data on the rise, the urgency for high-quality biodiversity data is becoming very real.

69% of the world’s largest 250 companies are now obtaining third-party verification of their ESG data, according to KPMG’s 2024 Survey of Sustainability Reporting – and this is set to grow.

This is helping to influence a growing movement to access ground-truth or site-level data across supply chains, providing the deeper insights required to inform meaningful management decisions.

As Pippa Howard, Chief Nature Strategist at NatureMetrics, states: “We need to move beyond tick-box exercises and model-based data - it's time for real, measurable action on biodiversity. It is only through understanding the state of nature (at site-level) that we’ll help to build resilient supply chains, businesses and economies. This is what we’re helping organizations do at NatureMetrics – truly understand the health of ecosystems.”

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The argument for investing in site-level ecosystem monitoring

CSRD, like the Sustainable Finance Disclosure Regulation (SFDR), is centred around the concept of double materiality, which determines which impacts an organization must disclose. CSRD’s double materiality approach makes it necessary for companies to understand both how they impact nature and how nature impacts them.

A double materiality assessment is the essential first step towards CSRD compliance. It allows organizations to focus on the sustainability matters that are most relevant to them and their stakeholders. This dictates the topics they need to report on.

There can be considerable risks attached to not understanding and mitigating your nature impacts. Many ecosystems are approaching a tipping point from which they may never recover. Regulators, investors, and consumers are demanding more accountability and transparency.

By acting now, organizations can protect precious natural resources and capital.

Amy Sellers, Principal Consultant at NatureMetrics, explains: “if you can’t measure nature, you can’t manage it. Every business will need to accurately evaluate their relationship with nature to understand nature-related risks. Businesses using site level data can understand their impact and dependencies and therefore make strategic decisions that reduce risks and restore vital ecosystems - improving their reputations, encouraging investment and contributing towards a more sustainable economy’’.

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eDNA revolutionizes the ability to measure nature at scale

Until very recently, a major challenge with integrating quality nature data into reporting structures has been a lack of standardization and scale. New technology such as environmental DNA (eDNA) is changing this.

“eDNA technologies enable businesses to generate a whole new data layer of nature intelligence, capturing the biodiversity of their project sites across the tree of life”, comments Laura Plant, Business Development Director at NatureMetrics.

“It allows businesses to truly understand the biodiversity of their sites, which unlocks opportunities to start monitoring the performance of their environments thanks to statistically robust data. Businesses can now translate site-level data up to the boardroom and everyone in between. eDNA is scalable, cost-effective, easy to do, and extremely quick in the field”, Plant continues.

As 50,000 companies prepare to respond to this important new regulation, those that commit to understanding their nature impacts and dependencies are set to outperform their competitors.

Our new guide - Enhancing your CSRD journey with robust nature data – provides practical insights on how your business can get ahead and turn CSRD ESRS E4 into an opportunity to build long-term resilience into your business model.

Download your copy here.

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