If disclosing a transition plan, the undertaking may:

1. explain how it will adjust its strategy and business model to improve and, ultimately, achieve alignment with relevant local, national and global public policy goals and targets related to biodiversity and ecosystems including the vision of the Kunming-Montreal Global Biodiversity Framework and its relevant goals and targets, the EU Biodiversity Strategy for 2030, and Directive 2009/147/EC Council Directive 92/43/EEC (the EU Birds and Habitats Directives) and, as appropriate, planetary boundaries related to biosphere integrity and land-system change ;
2. include information about its own operations and also explain how it is responding to material impacts in its upstream and downstream value chain identified in its materiality assessment in accordance with ESRS 2 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities;
3. explain how its strategy interacts with its transition plan;
4. explain how it contributes to addressing biodiversity and ecosystem impact drivers and its possible mitigation actions following the mitigation hierarchy and the main path-dependencies and locked-in assets and resources (e.g., plants, raw materials) that are associated with biodiversity and ecosystems change; 
5. explain and quantify its investments and funding supporting the implementation of its transition plan, with a reference to the key performance indicators of taxonomy-aligned CapEx, and where relevant the CapEx plans, that the undertaking discloses in accordance with Commission Delegated Regulation (EU) 2021/2178;
6. if it has economic activities that are covered by delegated regulations on biodiversity under the Taxonomy Regulation, explain any objective or plans (CapEX, CapEx plans) that it has for aligning its economic activities (revenues, CapEx) with the criteria established in those delegated regulations; 
7. explain how biodiversity offsets are used as part of the transition plan, and if so, where the offsets are planned to be used, the extent of use in relation to the overall transition plan, and whether the mitigation hierarchy was considered; 
8. explain how the process of implementing and updating the transition plan is managed;
9. explain how it measures progress, namely indicate the metrics and methodologies it uses for that purpose;
10. indicate whether the administrative, management and supervisory bodies have approved the transition plan; and 
11. indicate current challenges and limitations to draft a plan in relation to areas of significant impact and how the company is addressing those challenges.

If disclosing a transition plan, the undertaking may, for example, refer to the following targets from the EU Biodiversity Strategy for 2030:

1. The decline of pollinators is reversed.
2. The risk and use of chemical pesticides is reduced by 50%, and the use of more hazardous pesticides is reduced by 50%. 
3. At least 25% of agricultural land is under organic farming management, and the uptake of agro-ecological practices is significantly increased.
4. Three billion additional trees are planted in the EU, in full respect of ecological principles. 
5. Significant progress in the remediation of contaminated soil sites .
6. At least 25 000 km of free-flowing rivers are restored.
7. The losses of nutrients from fertilisers are reduced by 50%, resulting in the reduction of the use of fertilisers by at least 20%.
8. The negative impacts on sensitive species and habitats, including on the seabed through fishing and extraction activities, are substantially reduced to achieve good environmental status.

If disclosing a transition plan, the undertaking may also refer to the Sustainable Development Goals, in particular: 

1. SDG 2 – End hunger, achieve food security and improved nutrition and promote sustainable agriculture;
2. SDG 6 – Ensure availability and sustainable management of water and sanitation for all;
3. SDG 14 – Conserve and sustainably use the oceans, seas and marine resources for sustainable development; and 
4. SDG 15 – Protect, restore and promote sustainable use of terrestrial ecosystems , sustainably manage forests, combat desertification , and halt and reverse land degradation and halt biodiversity loss.

The materiality assessment under ESRS E4 includes the undertaking’s:

1. contribution to direct impact drivers on biodiversity loss  ^[81]: 
   1. climate change;
   2. land-use change (e.g., land artificialisation), freshwater -use change and sea-use change; 
   3. direct exploitation; 
   4. invasive alien species ;
   5. pollution; and
   6. others.
2. impacts on the state of species (i.e., species population size, species global extinction risk);
3. impacts on the extent and condition of ecosystems including through land degradation , desertification and soil sealing ); and
4. impacts and dependencies on ecosystem services.

When assessing the materiality of impacts , dependencies , risks and opportunities the undertaking shall consider the provisions in ESRS 2 IRO-1 and ESRS 1 Chapter 3 Double materiality as the basis for sustainability disclosures and describe its considerations.

The undertaking shall assess the materiality of biodiversity and ecosystems in its own operations and its upstream and downstream value chain , and may conduct its materiality assessment in line with the first three phases of the LEAP approach: Locate (paragraph AR 7), Evaluate (paragraph AR 8) and Assess (paragraph AR 9).

Phase 1 relates to the localisation of relevant sites regarding its interface with biodiversity and ecosystems . To identify these relevant sites the undertaking may: 

1. develop a list of locations of direct assets and operations and related upstream and downstream value chain that are relevant to the undertakings business activities. Furthermore, the undertaking may provide information about sites for which future operations have been formally announced;
2. list the biomes and ecosystems it is interfacing with based on the list of locations identified under paragraph AR 7(a); 
3. identify the current integrity and importance of biodiversity and ecosystem at each location taking into consideration the information provided in paragraphs 16 and 17;
4. develop a list of locations where the undertaking is interfacing with locations in or near biodiversity-sensitive areas taking into consideration the information provided in paragraphs 16 and 17; and 
5. identify which sectors, business units, value chains or asset classes are interfacing with biodiversity and ecosystems in these material sites. Instead of identifying these interfaces per site, the undertaking may choose to identify them per raw material procured or sold by weight in tons, if such practice offers greater transparency.

In Phase 2, to evaluate its actual or potential impacts and dependencies on biodiversity and ecosystems for relevant sites , the undertaking may:

1. identify business processes and activities that interface with biodiversity and ecosystems; 
2. identify actual and potential impacts and dependencies;
3. ndicate the size, scale, frequency of occurrence and timeframe of the impacts on biodiversity and ecosystems taking into consideration the disclosures under paragraphs 16 and 17. Furthermore, the undertaking may disclose: 
   1. the percentage of its suppliers ’ facilities which are located in risk prone areas (with threatened species on the IUCN Red List of Species, the Birds and Habitats Directive or nationally list of threatened species, or in officially recognised Protected Areas, the Natura 2000 network of protected areas and Key Biodiversity Areas);
   2. the percentage of its procurement spend from suppliers with facilities which are located in risk prone areas (with threatened species on the IUCN Red List of Species, the Birds and Habitats Directive or nationally list of threatened species, or in officially recognised Protected Areas, the Natura 2000 network of protected areas and Key Biodiversity Areas); and
4. indicate the size and scale of the dependencies on biodiversity and ecosystems, including on raw materials, natural resources and ecosystem services . The undertaking may rely on the international classifications such as the Common International Classification of Ecosystem Services (CICES).

In Phase 3, to assesses its material risks and opportunities based on the results of Phases 1 and 2, the undertaking may consider the following categories: 

1. physical risks : 
   1. acute risks (e.g., natural disasters exacerbated by loss of coastal protection from ecosystems , leading to costs of storm damage to coastal infrastructure, disease or pests affecting the species or variety of crop the undertaking relies on, especially in the case of no or low genetic diversity, species loss and ecosystem degradation ); and
   2. chronic risks (e.g., loss of crop yield due to decline in pollination services, increasing scarcity or variable production of key natural inputs, ecosystem degradation due to operations leading to, for example, coastal erosion and forest fragmentation, ocean acidification, land loss to desertification and soil degradation and consequent loss of soil fertility, species loss). 
2. transition risks , including:
   1. policy and legal: e.g. introduction of regulation or policy (e.g. changes such as increased land protection); exposure to sanctions and litigation (e.g. spills of polluting effluents that damage human and ecosystem health; or violation of biodiversity-related rights, permits or allocations; or negligence towards or killing of threatened species ); enhanced reporting obligations on biodiversity, ecosystems and related services;
   2. technology: e.g. substitution of products or services by products or services with a lower impact on biodiversity or dependence on ecosystem services , lack of access to data or access to poor quality data that hamper biodiversity-related assessments, transition to more efficient and cleaner technologies (i.e. with lower impacts on biodiversity), new monitoring technologies (e.g. satellite), requirements to use certain technologies (e.g. climate resistant crops, mechanical pollinators, water purification, flood protection); 
   3. market: e.g., shifting supply, demand and financing, volatility or increased costs of raw materials (e.g., biodiversity-intense inputs for which price has risen due to ecosystem degradation ); 
   4. reputation: e.g., changing societal, customer or community perceptions as a result of an organisation’s role in loss of biodiversity, violation of nature-related rights through operations, negative media coverage due to impacts on critical species and/or ecosystems, biodiversity-related social conflicts over endangered species, protected areas, resources or pollution . 
3. systemic risks , including: 
   1. ecosystem collapse risks that a critical natural system no longer functions, e.g., tipping points are reached and the collapse of ecosystems resulting in wholesale geographic or sector losses (summing physical risks);
   2. aggregated risk linked to fundamental impacts of biodiversity loss to levels of transition and physical risk across one or more sectors in a portfolio (corporate or financial); and 
   3. contagion risks that financial difficulties of certain corporations or financial institutions linked to failure to account for exposure to biodiversity-related risks spill over to the economic system as a whole.
4. opportunities, including for example:
   1. business performance categories: resource efficiency; products and services; markets; capital flow and financing; reputational capital; and
   2. sustainability performance categories: ecosystem protection, restoration and regeneration ; sustainability use of natural resources.

Presentation of information:

The undertaking may consider the tables below to facilitate its materiality assessment of material sites identified
under paragraph AR 7:

 

Ecosystem service…	Actual or potential dependencies
…	Change of functionality	Financial loss
…	Limited, moderate or significant	Limited, moderate or significant
…	…	…

 

Site location	Threatened species, protected areas, key biodiversity areas	Actual or potential impacts
…	…	Frequency of occurrence	Speed of impact	Severity of impact	Potential for mitigation
…	…	High, medium or low	<1 year or 1-3 years or >3 years	High, medium or low	High, medium or low
…	…	…	…	…	…

With regard to AR 7(e), the undertaking may consider using the table below:

Where are the raw materials produced or sourced from?	Absolute weight of raw materials (and percentage of the raw material weight)
In areas with species listed on the IUCN Red List of Threatened Species, the Birds and Habitats Directive or on national lists of threated species	…
In officially recognised protected Areas	…
In other Key Biodiversity Areas	…

The policies described under this Disclosure Requirement may be integrated in broader environmental or sustainability policies covering different subtopics.

The undertaking may also provide information on how the policy refers to the production, sourcing or consumption of raw materials, and in particular how it: 

1. limits procurement from suppliers that cannot demonstrate that they are not contributing to significant damage to protected areas or key biodiversity areas (e.g., through certification);
2. refers to recognised standards or third-party certifications overseen by regulators; and
3. addresses raw materials originating from ecosystems that have been managed to maintain or enhance conditions for biodiversity, as demonstrated by regular monitoring and reporting of biodiversity status and gains or losses.

The undertaking may disclose connections and alignment with other global goals and agreements such as the SDGs 2, 6, 14 and 15 or any other well established global convention related to biodiversity and ecosystems.

When disclosing policies related to social consequences of biodiversity and ecosystems related dependencies and impacts under 23 (f), the undertaking may notably refer to the Nagoya Protocol and the Convention for Biological Diversity (CBD).

When disclosing information about whether and how its policies address the social consequences of biodiversity and ecosystems-related impacts under paragraph 23(f), the undertaking may provide information in relation to:

1. the fair and equitable sharing of the benefits arising from the utilisation of genetic resources; and 
2. the free, prior and informed consent for access to genetic resources.

The undertaking may also explain how its policy enables it to: 

1. avoid negative impacts on biodiversity and ecosystems in its own operations and related upstream and downstream value chain ; 
2. reduce and minimise its negative impacts on biodiversity and ecosystems in its operations and throughout the upstream and downstream value chain that cannot be avoided; 
3. restore and rehabilitate degraded ecosystems or restore cleared ecosystems following exposure to impacts that cannot be completely avoided and/or minimised; and
4. mitigate its contribution to material biodiversity loss drivers.

When disclosing its policies , if referring to third-party standards of conduct, the undertaking may disclose whether the standard used:

1. is objective and achievable based on a scientific approach to identifying issues, and realistic in assessing how these issues can be addressed on the ground under a variety of practical circumstances; 
2. is developed or maintained through a process of ongoing consultation with stakeholders with balanced input from all relevant stakeholder groups, including producers, traders, processors, financiers, local people and communities, indigenous peoples, and civil society organisations representing consumer , environmental and social interests, with no group holding undue authority or veto power over the content; 
3. encourages a step-wise approach and continuous improvement, both in the standard and its application of better management practices, and requires the establishment of meaningful targets and specific milestones to indicate progress against principles and criteria over time;
4. is verifiable through independent certifying or verifying bodies, which have defined and rigorous assessment procedures that avoid conflicts of interest, and are compliant with ISO guidance on accreditation and verification procedures or Article 5(2) of Regulation (EC) No 765/2008; and 
5. conforms to the ISEAL Code of Good Practice.

The undertaking may relate significant monetary amounts of CapEx and OpEx required to implement the actions taken or planned to:

1. the relevant line items or notes in the financial statements;
2. the key performance indicators required under article 8 of Regulation (EU) 2020/852 and under Commission Delegated Regulation (EU) 2021/2178; and
3. if applicable, the CapEx plan required by Commission Delegated Regulation (EU) 2021/2178.

The undertaking may disclose whether it considers an “avoidance” action plan, which prevents damaging actions before they take place. Avoidance often involves a decision to deviate from the business-as-usual project development path. An example of avoidance is altering the biodiversity and ecosystem footprint of a project to avoid destruction of natural habitat on the site and/or establishing set-asides where priority biodiversity values are present and will be conserved. At a minimum, avoidance should be considered where there are biodiversity and ecosystem-related values that are in one of the following categories: particularly vulnerable and irreplaceable, of particular concern to stakeholders , or where a cautious approach is warranted due to uncertainty about impact assessment or about the efficacy of management measures. The three main types of avoidance are defined below:

1. avoidance through site selection (Locate the entire project away from areas recognised for important biodiversity values);
2. avoidance through project design (Configure infrastructure to preserve areas at the project site with important biodiversity values); and 
3. avoidance through scheduling (Time project activities to account for patterns of species behaviour (e.g., breeding, migration) or ecosystem functions (e.g., river dynamics).

With regard to key actions , the undertaking may disclose:

1. a list of key stakeholders involved (e.g., competitors, suppliers, retailers, other business partners, affected communities and authorities, government agencies) and how they are involved, mentioning key stakeholders negatively or positively impacted by actions and how they are impacted, including impacts or benefits created for affected communities, smallholders, indigenous peoples or other persons in vulnerable situations;
2. where applicable, an explanation of the need for appropriate consultations and the need to respect the decisions of affected communities;
3. a brief assessment of whether the key actions may induce significant negative sustainability impacts ; 
4. an explanation of whether the key action is intended to be a one-time initiative or systematic practice; 
5. an explanation of whether the key action plan is carried out only by the undertaking, using the undertaking’s resources, or whether it is part of a wider initiative to which the undertaking significantly contributes. If the key action plan is part of a wider initiative, the undertaking may provide more information on the project, its sponsors and other participants;
6. a description of how it contributes to systemwide change, notably to alter the drivers of biodiversity and ecosystem change, e.g., through technological, economic, institutional, and social factors and changes in underlying values and behaviours;

In the context of this Disclosure Requirement, “local and indigenous knowledge” refer to the understandings, skills and philosophies developed by societies with long histories of interaction with their natural surroundings. For rural and indigenous peoples , local knowledge informs decision-making about fundamental aspects of day-to-day life.

The undertaking may specify whether the target addresses shortcomings related to the Substantial Contribution criteria for Biodiversity as defined in the delegated acts adopted pursuant to Article 15(2) of Regulation (EU) 2020/852. Where the Do No Significant Harm (DNSH) criteria for Biodiversity as defined in delegated acts adopted pursuant to Article 10(3), Article 11(3), Article 12(2), Article 13(2), and Article 14(2) of Regulation (EU) 2020/852 are not met, the undertaking may specify whether the target addresses shortcomings related those DNSH critera.

When disclosing information required under paragraph 29 for the purpose of setting targets the undertaking shall consider the need for an informed and willing consent of local and indigenous peoples , the need for appropriate consultations and the need to respect the decisions of these communities.

The targets related to material impacts may be presented in a table as illustrated below:

Type of target according to mitigation hierarchy	Baseline value and base year	Target value and geographical scope			Connected policy or legislation if relevant
		2025	2030	2050
Avoidance
Minimisation
Rehabilitation and restoration
Compensation or offsets

The targets related to the potentially material sustainability matters listed in paragraph AR 4 of this Standard, may be presented in a table as illustrated below:

Type of target according to sustainability matter	Baseline value and base year	Target value and geographical scope			Connected policy or legislation if relevant
		2025	2030	Up to 2050

Measurable targets related to biodiversity and ecosystems may be expressed as:

1. size and location of all habitat areas protected or restored, whether directly or indirectly controlled by the undertaking, and whether the success of the restoration measure was or is approved by independent external professionals;
2. recreated surfaces (environments in which management initiatives are implemented so as to create a habitat on a site where it did not exist initially); or 
3. number or percentage of projects / sites whose ecological integrity was improved (e.g., installation of fish passes, wildlife corridors).

When preparing the information required under this Disclosure Requirement, the undertaking shall consider and may describe:

1. the methodologies and metrics used and an explanation for why these methodologies and metrics are selected, as well as their assumptions, limitations and uncertainties, and any changes in methodologies made over time and why they occurred;
2. the scope of the metrics and methodologies, for example:
   1. undertaking, site , brand, commodity, corporate business unit, activity; 
   2. aspects (as set out in paragraph AR 4) covered. 
3. the biodiversity components of the metrics: species specific, ecosystem specific;
4. the geographies covered by the methodology and an explanation of why any relevant geographies were omitted;
5. how the metrics integrate ecological thresholds (e.g., the biosphere integrity and land-system change, planetary boundaries ) and allocations; 
6. the frequency of monitoring, key metrics being monitored, and the baseline condition/value and baseline year/period, as well as the reference period;
7. whether these metrics rely on primary data, secondary data, modelled data or on expert judgement, or a mixture of these;
8. an indication of which action is measured and monitored via the metrics and how they relate to the achievement of targets ;
9. whether metrics are mandatory (required by legislation) or voluntary. If they are mandatory, the undertaking may indicate the relevant legislation; if voluntary, the undertaking may refer to any voluntary standard or procedure used; and 
10. whether the metrics are informed by or correspond to expectations or recommendations of relevant and authoritative national, EU-level or intergovernmental guidelines, policies , legislation or agreements, such as the Convention for Biological Diversity (CBD) or IPBES.

The undertaking shall disclose metrics that are verifiable and that are technically and scientifically robust considering the appropriate time scales geographies, and may disclose how its selected metrics correspond to those criteria. To ensure that the metric is relevant there should be a clear relationship between the indicator and the purpose of the measurement. Uncertainties should be reduced as far as possible. Data or mechanisms used should be supported by well-established organisations and updated over time. Robust modelled data and expert judgment can be used where data gaps exist. The methodology shall be sufficiently detailed to allow for meaningful comparison of impacts and mitigation activities over time. Information gathering processes and definitions must be systematically applied. This enables a meaningful review of the undertaking’s performance over time and helps internal and peer comparison.

If a metric corresponds to a target, the baseline for both shall be aligned. The biodiversity baseline is an essential component of the larger biodiversity and ecosystems management process. The baseline is necessary to inform impact assessment and management planning, as well as monitoring and adaptive management.

Methodologies available to collect data and measure the undertakings’ impacts on biodiversity and ecosystems may be separated into three categories as follows:

1. primary data: collected in-situ using on the ground surveys;
2. secondary data: including geospatial data layers that are overlaid with geographic location data of business activities.
   1. At the species level, data layers on the ranges of different species can be used to predict the species that may be present at different locations. This includes operation sites and sourcing locations. Different range layers will have different levels of accuracy depending on certain factors (e.g., whether species ranges have been refined based on availability of habitat ). Information on the threat status of the species, and the activities that threaten them, can provide an indication of the likely contribution that business activities may be having on driving population trends and threat status.
   2. At the ecosystem level, data layers reflecting change in the extent and condition of ecosystems can be applied, including levels of habitat fragmentation and connectivity.
3. modelled biodiversity state data: Model-based approaches are commonly used for measuring ecosystem level indicators (e.g., extent, condition, or function). Models quantify how the magnitude of different pressures affects the state of biodiversity. These are referred to as pressure-state relationships and are based on globally collected data. Modelling results are applied locally to estimate how undertaking-level pressures will cause changes in ecosystem condition.An impact driver generally has three main characteristics: magnitude (e.g., amount of contaminant, noise intensity), spatial extent (e.g., area of land contaminated) and temporal extent (duration of persistence of contaminant).

With regard to life cycle assessment for land-use, the undertaking may refer to the “Land-use related environmental indicators for Life Cycle Assessment” by the Joint Research Center.

With regard to the introduction of invasive alien species, the undertaking may disclose the pathways and number of invasive alien species and the extent of surface covered by invasive alien species.

With regard to metrics on the extent and condition of ecosystems , useful guidance can be found in the work of the United Nations System of Environmental Economic Accounting Ecosystem Accounting (UN SEEA EA).

The undertaking may disclose in units of area (e.g., m2 or ha) on land-use using guidance provided by the Eco-Management and Audit Scheme (EMAS) ^[82]:

1. total use of land; 
2. total sealed area; 
3. total nature-oriented area on site ; and
4. total nature-oriented area off site.

The undertaking may disclose, for example, land cover change, which is the physical representation of the drivers “habitat modification” and “industrial and domestic activities”, i.e., the man-made or natural change of the physical properties of the earth’s surface at a specific location.

Land cover is a typical variable that can be assessed with earth observation data.

When reporting on material impacts related to the ecosystems , the undertaking may, in addition to the extent and condition of ecosystems, also consider the functioning of ecosystems by using:

1. a metric that measures a process or function that the ecosystem completes, or that reflects the ability of the ecosystem to undertake that specific process or function: e.g. net primary productivity, which is a measure of plant productivity based on the rate at which energy is stored by plants and made available to other species in the ecosystem. It is a core process that occurs for ecosystems to function. It is related to many factors, such as species diversity, but does not measure these factors directly; or
2. A metric that measures changes to the population of scientifically identified species under threat.

At the ecosystem level, data layers reflecting change in the extent and condition of ecosystems may be applied, including levels of habitat fragmentation and connectivity.

The undertaking may include an assessment of its related products and services at risk over the short-, medium- and long-term, explaining how these are defined, how financial amounts are estimated, and which critical assumptions are made.

The quantification of the anticipated financial effects in monetary terms under paragraph 45(a) may be a single amount or a range.