ESRS E4 vs TNFD: how the frameworks compare

Nature-related reporting has moved from a niche concern to a mainstream expectation. The framework landscape is confusing, and two names come up repeatedly: ESRS E4 and TNFD. Both deal with biodiversity, ecosystems, dependencies, impacts, risks, and opportunities. Both use similar language. But they do different jobs.

Here's the core distinction. ESRS E4 tells in-scope companies what they may need to disclose under CSRD. TNFD helps companies understand and structure their nature-related assessment. Used together, they can make biodiversity reporting clearer and more credible. But TNFD-aligned disclosure doesn't automatically equal ESRS E4 compliance.

This article explains what each framework does, where they overlap, where they diverge, and how to use them together. It reflects the regulatory position as at July 2026, including the European Commission's delegated act of 3 July 2026 (C(2026) 5010), which adopted the revised, simplified ESRS as part of the Omnibus I package.

What each framework does, in brief

ESRS E4 is the topical standard for biodiversity and ecosystems within CSRD. It applies when biodiversity is material under a Double Materiality Assessment, and it requires companies to disclose impacts, dependencies, risks, opportunities, policies, actions, targets, and metrics. After the 3 July 2026 delegated act (C(2026) 5010), the standard is simpler: mandatory datapoints are down by around 60%, E4-6 (Anticipated Financial Effects) has gone, and transition plan disclosure is now conditional. The simplified standard applies from FY2027, with voluntary early adoption available for FY2026. The double materiality gate is unchanged.

TNFD (Taskforce on Nature-related Financial Disclosures) is a voluntary framework for identifying, assessing, managing, and disclosing nature-related issues. Published in final form in September 2023, it organises disclosure across four pillars: governance, strategy, risk and impact management, and metrics and targets. Its practical contribution is the LEAP approach (Locate, Evaluate, Assess, Prepare), a structured method for conducting nature-related assessment. By November 2025, 733 organisations across 56 countries had committed to TNFD-aligned reporting, representing over USD 22.4 trillion in assets under management. For a closer look at how organisations are applying TNFD in practice, see In Good Nature: biodiversity reporting in practice.

The one-line summary: ESRS E4 answers what must we disclose under CSRD? TNFD answers how should we assess and think about our nature-related exposure?

How ESRS E4 and TNFD differ

The two frameworks share a lot of vocabulary, which makes the differences easy to miss. Here's where they diverge in ways that matter for reporting teams.

Regulatory status

This is the most fundamental difference. ESRS E4 is a legal requirement for in-scope companies where biodiversity is material. TNFD is a market and governance decision. That said, with 77% of investors indicating they want specific nature-related standards building on the TNFD (Responsible Investor survey, June 2025), investor-facing nature disclosures are increasingly expected even where regulation doesn't compel them.

Materiality lens

ESRS E4 sits within CSRD's double materiality framework. Both directions carry equal weight: how the company affects nature (impact materiality) and how nature affects the company (financial materiality). TNFD has a stronger financial risk and enterprise value orientation. It can support both sides of double materiality, but companies using it for ESRS purposes need to make sure impact materiality is fully addressed, rather than treated as secondary.

Assessment method

ESRS E4 sets out what companies must disclose, but it doesn't prescribe a single step-by-step assessment process. TNFD fills that gap. The LEAP approach gives reporting teams a structured method for moving from broad awareness of nature risk to specific, documented evidence. This is where TNFD adds the most direct value for ESRS E4 preparation.

Where the frameworks overlap

Despite those differences, the conceptual alignment is strong enough that a well-executed TNFD LEAP assessment will generate most of the evidence base needed for ESRS E4 reporting. Both frameworks ask companies to:

• Understand how they affect nature and how they depend on it.

• Assess nature-related risks and opportunities across operations and value chains.

• Connect biodiversity to governance and business strategy, rather than treating it as a standalone sustainability topic.

• Set metrics and targets linked to material impacts and dependencies, with transparency about data gaps and methodology. For a closer look at how biodiversity metrics work in practice, see How do biodiversity metrics fit into sustainability reporting?.

The practical implication: do the LEAP assessment once, then map the findings to ESRS E4 datapoints. That's more efficient than running two separate exercises. The translation step is still required, but companies aren't starting from scratch.

How to use TNFD to prepare for ESRS E4

TNFD's LEAP approach maps directly onto the evidence ESRS E4 requires. Here's how each step contributes.

Locate

Identify where operations and supply chains interface with nature. For ESRS E4, this supports mapping sites near protected or biodiversity-sensitive ecosystems, identifying high-risk sourcing regions, and building the geographic evidence base for location-specific disclosures.

Evaluate

Understand what the business takes from nature (dependencies) and what it does to it (impacts). For ESRS E4, this supports identifying direct and value chain biodiversity impacts, ecosystem service dependencies, and the links between biodiversity and other ESRS topics including climate change (E1), water (E3), pollution (E2), and land use.

Assess

Translate biodiversity issues into business-relevant risks and opportunities. For ESRS E4, this supports financial materiality conclusions, regulatory and reputational exposure, and identifying opportunities linked to resilience, sustainable sourcing, or better resource management.

Prepare

Organise governance, strategy, actions, targets, and disclosure. For ESRS E4, this supports preparing the Sustainability Statement input, documenting policies and targets, and building a clear evidence trail for assurance.

Key point. TNFD LEAP generates structured, documented evidence that can be translated into ESRS E4 disclosures. The translation step still requires careful mapping to ESRS datapoints, but the underlying assessment work isn't duplicated.

Where TNFD doesn't replace ESRS E4

TNFD is a useful tool, but it is not a substitute for CSRD compliance work. Three gaps matter most.

ESRS E4 has specific disclosure requirements

TNFD outputs are organised differently and use different terminology. A company that has completed a LEAP assessment still needs to check which ESRS E4 disclosure requirements its materiality conclusions trigger, map TNFD findings to ESRS datapoints, and identify any gaps between what TNFD covers and what ESRS E4 requires.

Double materiality goes further than financial risk

TNFD's primary framing is financial risk and enterprise value. CSRD's double materiality requirement means impact materiality, the company's effects on nature and on affected communities and ecosystems, has to be assessed with equal rigour. Companies that approach ESRS E4 preparation mainly through a TNFD lens risk underweighting the impact side. The impact materiality assessment for CSRD also requires a stakeholder-informed process and documented evidence of how affected groups are considered.

Assurance expectations are higher

CSRD Sustainability Statements are subject to limited assurance. TNFD-style narrative disclosures won't satisfy an assurance provider without a clear, documented evidence trail covering materiality conclusions, data sources, and methodology. The quality of the evidence trail matters as much as the quality of the disclosure itself.

Common mistakes to avoid

These are the errors that come up most often in practice.

• Assuming TNFD equals ESRS E4 compliance. The mapping step is essential and can't be skipped.

• Focusing only on financial risk. CSRD's double materiality requirement means impact materiality has to be assessed with the same rigour as financial risk. Disclosures that only address the risk-to-business side are incomplete under CSRD.

• Treating biodiversity as separate from other ESRS topics. Biodiversity connects directly to climate (E1), water (E3), pollution (E2), and resource use (E5). Nature-related assessment should be built into the broader environmental reporting process.

• Using generic nature language. Statements such as "we recognise the importance of ecosystem services" satisfy neither framework. Both need specifics: which locations, which activities, which dependencies, which risks, which actions.

• Starting location mapping too late. Nature-related assessment is fundamentally location-specific. Identifying sites near protected ecosystems and mapping supplier locations takes time, and data is often fragmented across business units and procurement systems. Companies that start this work late will struggle to produce credible disclosures on time.

How Koan can help

We help companies translate complex sustainability frameworks into clear reporting decisions. For ESRS E4 and TNFD, that means working through the assessment and disclosure process in a structured, practical way, without unnecessary duplication.

We can support:

• Double Materiality Assessment design for biodiversity and ecosystems.

• TNFD LEAP-based nature-related assessment across operations and value chains.

• Mapping TNFD outputs to ESRS E4 disclosure requirements and datapoints.

• CSRD scope and timeline assessment, including the implications of the 3 July 2026 delegated act.

• Plain English sustainability reporting that meets assurance expectations.

Need to understand how ESRS E4 and TNFD fit together for your company? Get in touch to discuss your nature-related assessment and CSRD reporting needs.