EU CSRD Prompts Vattenfall Biodiversity Transition Plan and Supply Chain Focus
Vattenfall, one of Europe’s largest electricity companies, has told OPIS that its decision to strengthen nature in its supply chains is a direct result of the European Union’s newly-enacted Corporate Sustainability Reporting Directive (CSRD).
The Swedish state-owned energy company unveiled a raft of measures at the end of last month as part of its Biodiversity Transition Plan, which it aims to implement over the next five years. Those policies include undertaking an assessment of nature-related impacts and dependencies in its supply chains in addition to boosting biodiversity at dozens of hydro, nuclear, wind, solar and sub-installation sites across Europe.
“We see our Biodiversity Transition Plan in itself as a direct response to the expectation in CSRD that companies disclose their strategic approach to biodiversity,” Helle Herk-Hansen, the company’s Vice President, Environment, told OPIS on Friday. “Several of the activities outlined in the plan are directly to meet CSRD requirements or to improve our reporting in the coming years. In particular, we are raising our ambition in how we address biodiversity across our value chain.”
Companies with over 500 employees must file CSRD reports in 2025 for the first time about the nature impacts and risks related to their operations in the previous financial year. As part of its ‘Omnibus’ package proposed in February, the EU Commission wants to ease some of the demands of CSRD by applying its requirements to companies with more than 1,000 employees and turnovers above €50 million ($57.06 million). But the scope of CSRD is still set to widen and apply to smaller businesses over the next few years.
Vattenfall acknowledged in the new publication that its plans to expand its operations will result in new biodiversity impacts in the company’s supply chain and across several European countries.
“Our operations impact land, water, and marine ecosystems through land and sea use, construction, and water disturbances. Additionally, sourcing fuels like biomass and [natural] gas significantly contributes to our land use footprint,” said the Biodiversity Transition Plan document. “Vattenfall’s land use is estimated to increase considerably by 2040 compared to a 2019 baseline. This projection takes into account our footprint in our fastest-growing markets, particularly in the areas of distribution and onshore wind energy.”
As a result, the Stockholm-based company plans to forge a new “biodiversity partnership” in 2027, according to the document. “We have not yet defined the type of partner this will be. It could be a private sector nature-based solutions provider,” Herk-Hansen told OPIS at the end of last week.
In the short-term, the company said that it will focus on undertaking a “supply chain biodiversity assessment” this year. “With this new analysis, our aim is to refine and deepen our understanding of our supply chain impacts and material dependencies on biodiversity. We will decide on additional actions based on this assessment,” said Herk-Hansen.
Vattenfall said that in addition to CSRD, its plan also aligns with the “transition implied by the Kunming-Montreal Global Biodiversity Framework,” agreed by nearly 200 countries at COP15 in 2022 and the “the guidelines provided by the Taskforce on Nature-related Financial Disclosures (TNFD).”
More than 500 banks, corporations and asset managers have also signed up over the last 15 months to the market-led TNFD, which involves adopters pledging to “assess, report and act on their nature-related dependencies, impacts, risks and opportunities”, according to its website. TNFD adopters include 129 financial institutions with $17.7 trillion of assets under management and 25% of the world’s global systemically important banks (GSIBs).
Supporters of TNFD and CSRD have argued that requiring companies to disclose their impacts on nature in direct operations and in their value chain in addition to identifying nature-related risks and dependencies will boost ‘insetting’ and the strengthening of nature that underpins corporate supply chains.
Biodiversity consultants and project developers have told OPIS over the last year that some big businesses across several sectors plan to use biodiversity credit methodologies to quantify the restoration of nature in their supply chains.
Outlining companies’ nature risks and dependencies “is a necessary first step”, UN biodiversity chief Astrid Schomaker told OPIS last month. “It’s good to disclose, but the whole [point of] disclosure is about how you then change your business model,” she added.
Vattenfall said that new practical measures outlined in its Biodiversity Transition Plan in response to CSRD include “continuous assessment of uranium suppliers from a biodiversity perspective”; creating “action plans during 2025 for key species” affected by its Nordic hydropower operations; developing management plans by 2026 in all biodiversity “hotspot areas” along regional power line corridors as well as improving biodiversity in at least 20 sub-stations in central and northern Sweden by 2030.
Herk-Hansen told OPIS that the company is “positive towards voluntary biodiversity credits and see [such credits] as one of several key tracks to a nature positive contribution”.
She warned that voluntary credits must not be used as offsets but rather for their intended purpose of boosting nature after a company has attempted to compensate for any damage it does to biodiversity. “It is important that such mechanisms do not become a way to simply offset or ‘buy out’ of biodiversity impacts,” she said.
“In the future, we will look into how to enhance biodiversity on the nature-oriented properties we own. We will explore the potential of investing in nature-based solutions, but also explore whether these efforts could be linked to biodiversity credits,” said Herk-Hansen.
–Reporting by Anthony Lane, alane@opisnet.com; Editing by Humberto J. Rocha, hrocha@opisnet.com