EFRAG Sustainability Reporting Technical Expert Group (SR TEG) has suggested to the sustainability reporting board (SRB) the inclusion of land footprint/turnover as a metric in ESRS E4 on biodiversity.
ESRS E4 was drafted with a principle-based approach but respondents to the public consultation have asked for more practical metrics to work with in the standard, Philippe Diaz, a member of the SR TEG, explained to the board.
Luca Bonaccorsi, another SR TEG member, said land use was one of the best proxies to measure or gauge the impact on biodiversity. They are different ways to measure land use, he continued, "total land use land use in protected areas, and then hopefully, a lifecycle assessment".
SRB member and associate partner, sustainability expert and authorized public accountant at EY in Sweden, Charlotte Söderlund, questioned whether disclosing the ratio of land use to turnover was necessary given that the land footprint figure is available in the sustainability report and the turnover figure is available in the financial report.
"I believe the financial sector would easily be able to calculate their own ratios, and it doesn't add that much value to the financial sector," she said. "Whereas it triggers quite a lot of additional work within the companies in quality assurance etc.."
Diaz responded that there was more than one user of the information disclosed under ESRS. "For a lot of our users that don't necessarily have so many resources at hand, especially for example civil society organizations, I think it could really be very relevant information."
Bonaccorsi acknowledged Söderlund's point as valid . At the end of the day, if something needs to be sacrificed in a simplification effort, it will be the ratios, he said.
"It's better to sacrifice the ratio of something that is already in the annual report, rather than sacrificing a piece of relevant material data such as land use."