ISSB proposes nature-related disclosures
The International Sustainability Standards Board (ISSB) has put its proposals for nature-related disclosures out for consultation. Published on 22 October as an Exposure Draft of a Practice Statement, they are open for comment until 19 February 2027.
IFRS S1 already requires material information about nature; the proposals spell out how, drawing heavily on the Taskforce on Nature-related Financial Disclosures (TNFD). The focus is how a company’s dependencies and impacts on nature, from water to pollination, create financial risks and opportunities. These vary by industry, activity and location: the same water use can be trivial beside a healthy river and serious in a drought-prone basin. Companies would also consider their dealings with Indigenous Peoples and Local Communities who depend on the same land and water.
Two new cross-industry metrics would show the amount and percentage of assets or business activities vulnerable to nature-related risks, and those aligned with nature-related opportunities. Scenario analysis would be required, scaled to circumstances, as would an account of where nature and climate risks interact.
A Practice Statement follows the same due process as a Standard, but companies don’t necessarily need to apply the new guidance to be compliant with ISSB disclosure requirements, and jurisdictions decide whether to mandate it alongside the existing standards. The Foundation aims to protect the S1 and S2 rollout and, by the ISSB’s account, the Practice Statement differs little for now from a Standard not yet in force. Respondents are asked whether it should become one. It also warns the label could be misread as making nature reporting optional, which is not the intention at all. It does not; the requirements in IFRS S1 still apply.
The IFRS Foundation’s digital reporting team fed into the drafting, and nature is on its taxonomy horizon-scanning list. As the Practice Statement would be usable from issuance, ideally, tagging would be ready then too.
Read more and respond to the consultation here.
