Climate focus or biodiversity? Where to focus in corporate ESG plans

Increasing pressure from regulators, investors and consumers requires companies to choose clear ESG priorities. On the one hand, climate, with targets for emissions reduction, energy transition and resilience to climate risks; on the other hand, biodiversity, protecting ecosystems and natural services indispensable to supply chains, soil health and water security. European standards such as the European Sustainability Reporting Standards (ESRS) recognise the intertwining of these issues, but require different paths and metrics. Targeting one or the other dimension directs investment, reputation and access to capital in distinct ways. Understanding how the two priorities influence each other is the first step in building a credible ESG plan, consistent with stakeholder expectations and capable of generating long-term value.

Choosing to focus on climate in ESG plans means responding to one of the main regulatory and financial drivers globally. The European regulatory framework, from the Taxonomy Regulation to the CSRD (Corporate Sustainability Reporting Directive), pushes companies to measure and reduce CO₂ emissions, manage climate risks and invest in the green transition. From the perspective of sustainable finance, the climate focus is often rewarded by institutional investors, banks and funds that value climate risk as a key sustainability variable. Moreover, the reputational benefits of clear and certified climate targets can strengthen brand positioning. However, an excessive focus on climate change alone risks neglecting other relevant environmental impacts, such as soil loss, habitat degradation and exploitation of natural resources.

In recent years, biodiversity has taken centre stage in international sustainability debates, driven by deteriorating ecosystems and increasing demands for ecological accountability. The new ESRS standards, in particular the ESRS E4, oblige companies to report on direct and indirect impacts on ecosystems, identifying risk areas, mitigation measures and natural regeneration plans. Targeting biodiversity in ESG plans can be a distinctive choice, especially for companies operating in the extractive, agricultural, food or tourism sectors. The valorisation of natural capital not only strengthens the social licence to operate but also contributes to business resilience in the long term. However, measuring impacts on biodiversity is complex, requires innovative tools and often involves high initial costs. It is therefore crucial to integrate these activities into business strategy in a step-by-step manner

There is no single answer to the question of whether it is better to focus on climate or biodiversity: the key lies in double materiality and the sector-specificity of the company. According to the guidelines contained in the CNDCEC document, companies must analyse the current and potential impacts generated and suffered with respect to each environmental issue, considering both regulatory and stakeholder expectations. For a manufacturing company, for example, the climate focus may be a priority due to industrial emissions, while for a tourism operator biodiversity may have a greater impact on sustainability. In any case, the ESG approach must be integrated, consistent and supported by robust governance, capable of making informed decisions based on reliable data. The assessment of risk and opportunities from an ESG perspective cannot be separated from an overall view of the value generated in the long run.

The most advanced ESG companies are progressively overcoming the alternative between climate and biodiversity, adopting strategies that take into account the interconnections between the two issues. Indeed, climate change is one of the main causes of the loss of biodiversity, and conversely, the degradation of ecosystems reduces the planet's capacity to absorb CO₂. By investing in natural regeneration, reforestation or sustainable agriculture projects, climate benefits and biodiversity can be achieved together. This synergistic approach is also promoted by sustainable finance and international frameworks such as TNFD (Taskforce on Nature-related Financial Disclosures), which are pushing towards integrated reporting. Companies that manage to combine climate and ecosystem protection goals into a single strategic vision will be better positioned to address environmental risks, attract investment and create lasting value.

This article has been realised within the project "Biodiversity services EU expansion" (CUP: E43D22000480009) in the framework of the Lombardy Region's call for tenders "PR FESR 2021-2027 - LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalisation of Italian companies. 3Bee is the naturetech company that develops innovative technologies for monitoring, protecting and regenerating biodiversity, supporting companies in defining customised climate strategies based on the analysis of their impacts and dependencies on nature. With an established portfolio in Italy, Germany and France and prominent partnerships, 3Bee continues its expansion into international markets to create real impact through technology.