Why international biodiversity standards and regulations matter for corporate due diligence

This blog brings together the global landscape of biodiversity standards, the growing regulatory momentum, and why these developments matter for companies assessing their operations, suppliers, and supply chains.

A global shift towards biodiversity accountability

International biodiversity standards give companies a consistent way to identify, assess, and manage their impacts on the natural environment. They help organisations move from ad‑hoc environmental initiatives to systematic, auditable processes embedded in governance, risk management, and strategy, aligned with stakeholder expectations.

Key global drivers include:

• The UN Convention on Biological Diversity (CBD) and the Kunming‑Montreal Global Biodiversity Framework (GBF), which set global goals for halting and reversing nature loss.
• The rise of nature‑related financial risk as a mainstream concern for investors and regulators.
• Increasingly stringent supply‑chain due diligence laws that require companies to understand and mitigate biodiversity impacts beyond their direct operations.

Climate disclosure as a precedent: The role of the TCFD

The Task Force on Climate‑related Financial Disclosures (TCFD) was created by the Financial Stability Board to provide a consistent global framework for companies to disclose climate‑related financial risks and opportunities. Its recommendations – structured around governance, strategy, risk management, and metrics and targets – became the global benchmark for climate reporting. They have been adopted by regulators, stock exchanges, and investors worldwide, and are now embedded in the IFRS (ISSB) Sustainability Disclosure Standards.

For companies, TCFD matters because it established the architecture for how environmental risks should be assessed and disclosed: board‑level oversight, strategic implications, structured risk assessment, and transparent metrics. This architecture has directly influenced emerging nature‑related frameworks such as TNFD (see below) and biodiversity‑related reporting standards like the EU’s ESRS E4. Companies already reporting under the IFRS Standards are therefore well‑positioned to integrate biodiversity and nature‑related issues into their due‑diligence systems.

The TNFD: A global framework for nature-related risk

The Taskforce on Nature‑related Financial Disclosures (TNFD) provides a globally recognised framework for assessing and disclosing nature‑related dependencies, impacts, risks, and opportunities. It mirrors the structure of TCFD and is designed to be interoperable with major reporting regimes.

TNFD’s LEAP approach – Locate, Evaluate, Assess, Prepare – helps companies:

• Identify nature‑related risks in operations and supply chains.
• Understand how impacts on ecosystems translate into financial and strategic risks.
• Produce data and insights that feed directly into regulatory reporting (e.g., CSRD, CSDDD).

TNFD is rapidly becoming the reference point for companies that require a single, coherent framework for nature‑related due diligence.

European Regulations and Standards

European regulators are relatively advanced in embedding biodiversity into corporate reporting and due diligence.

The Corporate Sustainability Reporting Directive (CSRD) and ESRS E4

The CSRD requires large EU and certain non‑EU companies to disclose standardised information on environmental, social and governance impacts. The CSRD’s draft European Sustainability Reporting Standards (ESRS) E4 (Biodiversity and Ecosystems) require reporting on material impacts, risks, and opportunities related to biodiversity and ecosystems, covering terrestrial, freshwater, and marine habitats. This includes:

• Strategy and transition planning
• Policies and action to manage material biodiversity impacts including land degradation, desertification and deforestation
• Metrics that track the company’s direct contribution to biodiversity loss and biodiversity related targets
• Value‑chain impacts, not just direct operations.

This aligns closely with TNFD concepts and provides a legally binding structure for biodiversity reporting.

Corporate Sustainability Due Diligence Directive (CSDDD)

The CSDDD introduces mandatory environmental and human‑rights due diligence across global value chains. Environmental harms explicitly include biodiversity loss and ecosystem degradation. Companies must:

• Identify and assess actual and potential adverse impacts.
• Prevent, mitigate, and remedy them.
• Monitor and publicly report on due‑diligence processes.

While the CSRD provides the transparency framework for disclosure of biodiversity impacts, the CSDDD mandates the operational action – preventing and mitigating those impacts. Both Directives require companies to look beyond their direct operations into upstream suppliers and downstream impacts to mitigate biodiversity loss.

EU Deforestation Regulation (EUDR)

The EUDR requires companies placing certain commodities on the EU market to prove they are deforestation‑free. This includes:

• Geolocation of production plots.
• Risk assessment and mitigation.
• Traceability across supply chains.

EU Taxonomy and SFDR

The EU Taxonomy includes “protection and restoration of biodiversity and ecosystems” as an environmental objective. The EU Sustainable Finance Disclosure Regulation (SFDR) requires financial institutions to disclose biodiversity‑related adverse impacts.

Together, these frameworks link corporate biodiversity performance directly to access to sustainable finance. You can read our recent blog on the SFDR here.

Where the EU Habitats and Birds Directives fit in

The EU Birds Directive (1979) and EU Habitats Directive (1992) are the cornerstones of EU biodiversity policy. They underpin the Natura 2000 network – the world’s largest coordinated network of protected areas, covering almost one‑fifth of EU land and around 10% of its marine area .

Why these Directives matter for corporate due diligence

Although they primarily regulate Member States, they have direct implications for companies, especially those with operations or supply chains in Europe:

• They set strict legal protections for species and habitats, limiting harmful activities in protected areas and requiring appropriate assessments for projects likely to affect them.
• They influence national permitting regimes, meaning companies must consider Natura 2000 constraints when planning operations, infrastructure, or land‑use changes.
• They shape risk assessments: companies sourcing from or operating near protected areas must understand potential legal and reputational risks.
• They provide baseline ecological data that companies can use in TNFD‑aligned assessments by identifying sensitive sites, pinpointing where biodiversity is most valuable and vulnerable, and assisting companies in defining ‘priority locations’ under TNFD recommendations.

In short, these Directives define the ecological parameters within which companies must operate, and they increasingly intersect with corporate due‑diligence obligations under the CSRD, CSDDD, and EUDR.

What does the EU Omnibus mean for biodiversity-related regulations?

The EU Omnibus represents the European Commission’s attempt to simplify and streamline the EU’s sustainability regulatory framework while maintaining the ambition of the Green Deal.

For biodiversity‑related obligations, the Omnibus has several implications:

• The Omnibus aims to harmonise definitions, timelines, and reporting expectations across CSRD, CSDDD, and the Taxonomy, with the aim of reducing duplication and helping companies build a single, integrated approach to biodiversity due diligence and reporting.
• A two‑year delay for certain CSRD reporting cohorts, giving companies more time to prepare for biodiversity‑related disclosures under ESRS E4 . This does not reduce the scope of biodiversity reporting but shifts when some companies must begin.
• The Omnibus is not designed to dilute biodiversity protections. Instead, it seeks to remove unnecessary complexity – particularly where CSRD, CSDDD, and the Taxonomy overlap – with the aim of enabling companies to focus on the substance of biodiversity risk management rather than administrative burden.
• The aim is to provide clearer pathways for interoperability with global frameworks and make it easier for companies to align EU requirements with global frameworks such as TNFD and IFRS S1/S2, which follow similar governance‑strategy‑risk‑metrics structures.

National Regulations beyond the EU

United Kingdom

• Biodiversity Net Gain (BNG) requires most new developments in England to deliver at least 10% net gain in biodiversity value, secured for 30 years.
• UK regulators and investors are increasingly referencing TNFD as best practice for nature‑related risk management.

France: Duty of Vigilance Law

Requires large French companies to identify and prevent environmental damage – including biodiversity loss – across their global value chains.

Germany: Supply Chain Due Diligence Act (LkSG)

Covers environmental risks such as unlawful deforestation, harmful pollution, and excessive water use. Companies must assess and mitigate these risks in their supply chains.

United States

• The Endangered Species Act (ESA) restricts activities that harm listed species or critical habitats.
• The Lacey Act prohibits trade in illegally sourced timber and wildlife.
• State‑level initiatives increasingly target deforestation and water risk.

Brazil and other biodiversity‑rich countries

• Brazil’s Forest Code requires landowners to conserve native vegetation and protect sensitive areas.
• Companies sourcing from high‑risk biomes (Amazon, Cerrado) must ensure compliance with local land‑use laws and avoid deforestation‑linked supply chains.

Australia

• The EPBC Act requires assessment of actions likely to significantly impact protected species or ecosystems.
• Australia is exploring TNFD‑aligned disclosure expectations.

Why this matters for corporate due diligence

Biodiversity loss creates operational, financial, legal, and reputational risks. International standards and regulations help companies:

• Identify ecosystem dependencies (e.g., water, soil, pollination).
• Map impacts across operations and supply chains.
• Understand regulatory exposure and compliance obligations.

Growing expectations from investors and regulators

Nature‑related disclosure is rapidly becoming mandatory. Companies that adopt recognised frameworks early are better positioned to meet evolving requirements.

Supply‑chain resilience and traceability

Most biodiversity impacts occur upstream. Regulations like the EUDR and CSDDD require companies to:

• Trace commodities to source.
• Assess risks at the landscape level.
• Engage suppliers on biodiversity performance.

Strategic advantage

Companies that integrate biodiversity into governance and strategy can:

• Identify nature‑positive opportunities.
• Strengthen resilience to climate and nature‑related disruptions.
• Build trust with stakeholders.

The regulatory landscape for biodiversity is tightening quickly, and expectations for credible due diligence are rising. International standards such as TNFD, combined with regional and national regulations – from the CSRD and CSDDD to the EU Habitats and Birds Directives- provide the structure companies need to understand and manage their nature‑related risks.

Get in touch to find out how TDi can help your company integrate biodiversity into strategy, and with your nature-related reporting requirements.