Guide
Double materiality for nature
Under the CSRD, biodiversity and ecosystems (ESRS E4) must be reported if they are material from an impact perspective, a financial perspective, or both.
Inside-out
Impact materiality
Actual and potential impacts on biodiversity and ecosystems, considering severity (scale, scope, irremediability) and likelihood for potential impacts. Screening data on pressures is a strong starting point.
Outside-in
Financial materiality
Risks and opportunities that could affect cash flows, access to finance or cost of capital, often arising from dependencies on ecosystem services.
A practical approach
- 01
Understand the context
Business model, value chain, sites and stakeholders.
- 02
Identify IROs
Impacts, risks and opportunities across the drivers named in ESRS E4.
- 03
Assess
Apply thresholds for impact and financial materiality.
- 04
Document
Record methods and evidence so the result is auditable.
Where LEAP helps
TNFD’s LEAP approach offers a structured way to identify and assess nature-related issues, and the ESRS E4 application guidance refers to it as one possible approach. Results from the SBTN screening tool can feed directly into the impact side of your assessment.
This guide is for orientation only and is not legal or audit advice; CSRD requirements are being revised through the EU Omnibus process.
Get in touch
See what nature intelligence can do for your reporting
Tell us about your company, your reporting obligations and where you are on your nature journey. We will get back to you by email.