Biodiversity Impact Reporting for Industrial Sites: CSRD Requirements

Whether you’re a small manufacturer, supplier or subsidiary operating an industrial facility in Europe, biodiversity may not feel like an obvious sustainability topic. But under CSRD, companies must evaluate how their operations affect local ecosystems — including land use, pollution, proximity to sensitive sites and risks linked to water, soil and habitat quality. Some industrial organisations report under CSRD directly; others follow the VSME Standard voluntarily to support customer requests. In both cases, manufacturing sites hold important information because their physical footprint and emissions can influence local biodiversity more than office-based operations.

CSRD’s ESRS E4 standard (biodiversity and ecosystems) requires companies to assess impacts on ecosystems, dependencies such as water and soil, and risks related to protected areas. The Directive also requires companies to consider sustainability information from their value-chain partners where relevant to their own disclosures . For SMEs, the VSME Standard does not mandate biodiversity metrics directly but does require reporting of pollution (B4) and water consumption (B6) when measured, which are key inputs to biodiversity risk assessments .

This guide provides a practical, manufacturing-focused approach for understanding and reporting biodiversity impacts in a CSRD-aligned way — without the need for consultants or complex ecological studies.

1. Why Biodiversity Matters for Industrial Facilities

Manufacturing sites influence local ecosystems through land use, runoff, air emissions, noise, lighting, and wastewater discharges. Even facilities located in industrial zones may be close to:

• Rivers, wetlands or groundwater recharge areas
• Natura 2000 or national protected areas
• Ecologically sensitive habitats (e.g., woodlands, meadows, hedgerows)
• Agricultural land used by pollinators or bird species

While CSRD-reporting requirements apply mainly to larger companies, SMEs provide essential data that those companies rely on — especially when a supplier’s site sits near important ecological features.

Industrial biodiversity impacts typically relate to:

• Impermeable surfaces
• Discharge quality
• Soil contamination risk
• Airborne pollutants (e.g., particulates, VOCs, metals)
• Noise and operational disturbance
• Storage and handling of chemicals

For additional context on interconnected pollution themes, the pollution topic hub offers further reading.

2. What CSRD Requires on Biodiversity (ESRS E4)

CSRD requires companies to report:

1. Material impacts on ecosystems

Includes any activities that alter habitats, affect species, or change water or soil quality.

2. Dependencies

How the site relies on ecosystem services such as clean water, soil stability, and climate regulation.

3. Risks and opportunities

Including impacts from pollution, zoning constraints, water scarcity, or proximity to protected areas.

4. Actions, targets and progress

Measures taken to prevent pollution, restore habitats or reduce ecological risks.

SMEs are usually not required to prepare a full ESRS E4 disclosure unless in CSRD scope, but providing structured biodiversity information supports customers preparing their own reports.

3. Step-by-Step Biodiversity Assessment for Manufacturing Sites

This practical approach aligns with CSRD expectations while remaining achievable for smaller facilities.

Step 1 — Map your site and identify surrounding ecosystems

Start with a map showing:

• Site boundary
• Adjacent land uses (agriculture, woodland, river, industrial park)
• Distance to Natura 2000 or national protected areas
• Water bodies within 1–3 km
• Drainage routes (surface and wastewater discharge points)

This provides the core for understanding potential biodiversity interactions.

Step 2 — Evaluate land use and physical footprint

Consider how your site layout and infrastructure affect biodiversity:

• Extent of sealed surfaces (concrete, asphalt)
• Green spaces or habitat patches on-site
• Storage yards and potential soil compaction
• Construction or expansion areas that may influence local habitats

Manufacturing example: A fabrication plant expands its yard, replacing permeable ground with concrete. This changes runoff behaviour and may increase pollutant load entering drainage channels.

Step 3 — Analyse pollution-related pressures

Pollution is one of the most direct biodiversity impact pathways. Under VSME B4, SMEs must report pollutants if they already monitor or report them to authorities .

Relevant manufacturing pollutants include:

• Air: VOCs, particulates, metal fumes, NOₓ
• Water: metals, oils, suspended solids, chemicals from cleaning or plating
• Soil: leaks from tanks, chemical storage, spills

This data also supports other CSRD topics such as ESRS E2 (pollution) and ESRS E3 (water), helping customers understand how pollutants interact with local ecosystems.

Step 4 — Understand water use, discharge and hydrological impacts

Water is a core ecosystem dependency and impact driver.

Manufacturing examples:

• Rinsing and surface treatment can generate metal-laden wastewater
• Cooling water may alter temperature or quality of discharged flows
• High water withdrawals may strain local supplies in water-scarce regions

VSME requires SMEs to report water consumption (B6) when relevant, which also contributes to CSRD biodiversity assessments .

Use your water logs or discharge permits to evaluate potential risks.

Step 5 — Identify nature-related risks

Industrial SMEs may face biodiversity-related risks such as:

• Stricter discharge permits in sensitive areas
• Planning restrictions near protected habitats
• Operational disruption during high rainfall due to runoff controls
• Reputational risks with customers focused on ecosystem protection

Documenting these risks helps align with CSRD expectations, especially when supplying information to larger companies.

Step 6 — Document current practices and mitigation measures

These mitigation steps can be disclosed under VSME B2 as environmental initiatives (policies, actions and future plans) .

Examples include:

• Bunded chemical storage and spill-response systems
• Wastewater pre-treatment (e.g., pH correction, sedimentation)
• Stormwater filters or separators for oil and solids
• Habitat-friendly landscaping or green buffer zones
• Replacing exterior lighting with wildlife-friendly, directional LEDs
• Dust suppression around yards and cutting operations

Step 7 — Define improvement actions and optional targets

CSRD encourages targets where impacts are material, but SMEs can choose proportionate goals such as:

• Reducing the number or volume of pollutant discharges
• Improving wastewater treatment efficiency
• Increasing green areas on site
• Eliminating specific hazardous substances that pose ecological risks

These do not need to match the scientific precision required for large CSRD reporters — clarity and feasibility are more important.

4. What to Include in a CSRD-Aligned Biodiversity Disclosure (for SMEs)

SMEs usually provide biodiversity-relevant information as part of their customer sustainability packages, supplier portals or VSME reporting.

A practical disclosure structure includes:

1. Site overview and location context

• Description of operations
• Nearby ecosystems or protected areas
• Physical footprint and land use

2. Pollution and water interactions

• Pollutants monitored under permits (VSME B4)
• Water consumption and discharge (VSME B6)
• Any treatment systems or controls
• Stormwater management practices

3. Risks and dependencies

• Reliance on clean water
• Risk of soil or water contamination
• Regulatory risks linked to local habitats

4. Actions and performance

• Existing mitigation measures
• Waste, pollution and water improvements
• Any biodiversity-enhancing initiatives (e.g., green areas)

5. Targets (optional)

• General environmental performance goals
• Waste or discharge reduction targets

This information helps CSRD-reporting customers complete ESRS E4 without requiring you to develop complex ecological metrics.

5. Manufacturing Examples

Example A — Metal finishing facility near a river

• Discharges treated wastewater to sewer, monitors metals monthly
• Stormwater drains lead toward a tributary 1 km away
• Implements closed-loop rinsing to reduce water withdrawals
• Adds an oil separator and spill-response procedures
• Maintains a 10-metre vegetation buffer at the rear boundary

Example B — Electronics assembly plant in an industrial park

• Minimal discharge; main risks relate to waste handling and air emissions from soldering
• Located 3 km from a Natura 2000 grassland habitat
• Implements high-efficiency filters and waste segregation
• Adds native vegetation to boundary areas

Example C — Fabrication workshop expanding its yard

• Assesses runoff from new impermeable surfaces
• Introduces surface-water sediment traps
• Considers green roofing on storage structures
• Reports land-use changes to customers concerned about local flooding risk

Frequently Asked Questions

Do small factories need to complete full ESRS E4 biodiversity reporting?

Not unless they are directly in CSRD scope. SMEs can provide proportionate biodiversity information through VSME practices, pollution data (B4), water consumption (B6) and narrative descriptions of impacts.

How can we assess biodiversity without a consultant?

Start with maps, permits, water logs and simple site observations. You do not need species lists. Focus on land use, proximity to ecological areas, pollution controls, and water interactions.

Does being in an industrial zone exempt us from biodiversity reporting?

No. Even industrial zones may be near protected areas, rivers or agricultural habitats. CSRD expects companies to consider ecosystem impacts regardless of zoning.

How do we show improvement year to year?

Track changes in pollution controls, water use, runoff management, green space creation, and any pollution-reduction initiatives. For pollution-related improvements, the pollution topic hub offers additional context.

Key Terms

• Biodiversity: Variety of species and ecosystems in a given area.
• ESRS E4: CSRD biodiversity and ecosystems standard.
• Natura 2000: Network of protected habitats across the EU.
• Pollutants: Substances affecting air, water or soil; reportable under VSME B4 if monitored.
• Water consumption: Water not returned after use; required under VSME B6.
• Mitigation measures: Actions reducing ecological impacts.

Conclusion

Biodiversity impact reporting does not require scientific expertise. For industrial SMEs, a practical assessment of land use, pollution pathways, water interactions and local ecological context is enough to support customer CSRD reporting while identifying risks and opportunities for your own site. With consistent documentation and simple improvements, biodiversity becomes part of everyday environmental management rather than a specialised exercise.

With a clear structure and consistent effort, CSRD becomes an advantage — not an obstacle.