Paper published on Biodiversity reporting: standardisation, materiality and assurance

In a recently published paper in Current Opinion in Environmental Sustainability, BIOPATH researchers examine the evolving landscape of biodiversity reporting standards. Determining materiality, a cornerstone of reporting, is challenging due to varying perspectives on what is material. The materiality of biodiversity issues drives the demand for standardised and reliable information.

Corporate biodiversity reporting has emerged as an instrument for enhancing transparency, encouraging responsible behaviour, and fostering environmental stewardship. This is a result of regulatory and market demands for corporates to mitigate the negative effects of their operations on biodiversity and nature. Although a variety of reporting regulations exist, they do not point to a common ground for reporting. Frameworks such as GRI, ISSB, ESRS and TNFD address different aspects of corporate biodiversity impact and adopt different conceptions of assurance and materiality.

Mari Paananen, Associate professor, School of Business, Economics and Law at Gothenburg University, one of the five authoers, describes how comparisons of data could be improved.

“Each standard adopts a particular perspective on corporate – biosphere connections. Creating a framework which demonstrates the focus and role of each standard is likely to be more valuable. Such a framework would offer greater clarity of what is being reported, highlight if comparisons are possible, and enhance transparency of the reporting landscape.”

Viktor Elliot, Senior lecturer, School of Business, Economics and Law at Gothenburg University, adds how the paper is useful to users trying to understand biodiversity:

“We contribute within this context by examining the complexities and challenges associated with reporting on biodiversity, this study aims to offer insights that inform the development of robust biodiversity reporting standards that cater to the needs of markets and other report users.”

Table 1: Five key environmental reporting standards

The study provides a useful overview

The paper examines the concept of materiality in sustainability reporting, proposing a conceptualization that aims to benefit society, the environment, and investors. Further, it scrutinizes the Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information.

The study also reveiws global trends in the assurance practices of sustainability reports and finds that the development of assurance practices is not keeping pace with the ongoing expansion of sustainability reporting.

In accordance with prior research and the authors conclude that non-financial activities, including biodiversity, are linked to human behavior and impacts on the financial situation of businesses. The study emphasizes that businesses should pay attention to biodiversity and that accounting has evolved from producing financial statements to communicating with the broader society by incorporating environmental information.

How to align corporate activities with the biosphere

The paper proposes a framework for identifying standards for assessing companies´ exposure to and impact on biodiversity, setting priorities for corporate biodiversity management, and monitoring the effectiveness of these actions. The authors argue that while biodiversity management is still in its infancy, there is an urgent need for research that develops pragmatic management and accounting approaches to safeguard and re-establish biodiversity.

The biosphere crisis underscores that efforts to stop adverse negative environmental impact have been insufficient and that transformative change is urgently needed. Corporate biodiversity reporting is increasingly demanded to govern corporate behavior and as concluded in the paper: “Ideally, reporting (appropriately verified) should enhance transparency and cultivate trust among stakeholders and investors. Moreover, it could empower companies to make informed decisions, set meaningful biodiversity goals, and contribute to global efforts to address biodiversity loss.”

Link to paper at Science Direct

Authors: Viktor Elliot , Kristina Jonäll , Mari Paananen, Jan Bebbington and Giovanna Michelon