guide that harmonises the European Sustainability Reporting Standards (ESRS) with the TNFD disclosure recommendations. <\/a>This action highlights the remarkable overlap between the two frameworks, making it easier for companies to comply with the Corporate Sustainability Reporting Directive (CSRD). The collaboration, formalised through a Memorandum of Understanding (MoU), aims to ensure consistent and high quality sustainability reporting, providing accurate data for stakeholders and promoting sustainable development. <\/p>\n\nThe high level of correspondence between the ESRS environmental standards beyond climate change (E2-E5) and the key recommendations and metrics of the TNFD is reflected, among others, in the following aspects:<\/p>\n\n
Concepts and definitions:<\/strong> Both TNFD and ESRS recommend the need to disclose impacts, risks and opportunities related to nature, including dependencies on nature to the extent that they generate material risks.<\/p>\n\nMateriality approach:<\/strong> The ESRS requires disclosures to be based on the principle of dual materiality. The TNFD approach allows for different approaches to materiality, including the dual materiality approach required by the ESRS. <\/p>\n\nLEAP approach<\/strong>: TNFD developed the LEAP approach for economic actors to identify and assess their nature-related issues. The ESRS states that companies can conduct their materiality assessment on sustainability issues such as pollution, water, biodiversity and ecosystems, and the circular economy (all ESRS environmental standards beyond climate change) using the LEAP approach. The LEAP approach has been designed to help reporting organisations identify both impact materiality and financial materiality, providing a comprehensive approach for CSRD report preparers. <\/p>\n\nReporting pillars: <\/strong>Both the TNFD recommended disclosures and the ESRS reporting areas are organised around the four disclosure pillars of the Task Force on Climate-related Financial Disclosures (TCFD): Governance, Strategy, Risk Management, and Metrics and Objectives.<\/p>\n\nRecommended disclosures and metrics:<\/strong> The 14 disclosures recommended by TNFD are reflected in the ESRS. Both the TNFD recommended disclosures and the ESRS requirements are designed to provide relevant and accurate information on sustainability issues related to nature. In addition, there is strong consistency between the key global disclosure metrics of the TNFD and the related metrics in the ESRS. <\/p>\n\nCommon approach to the assessment of dependencies, impacts, risks and opportunities (DIRO):<\/p>\n