• Nature loss could cost the global economy up to $2.7 trillion annually, elevating biodiversity risk to a core financial concern
• Over 750 companies and 200 financial institutions are already aligning with nature disclosure frameworks, increasing pressure for standardization
• ISSB faces a governance decision that could shape how global capital markets integrate biodiversity alongside climate risk

Pressure Builds Ahead of ISSB Decision on Nature Reporting

A coalition of sustainability leaders, scientists, financial institutions and civil society groups is urging the International Sustainability Standards Board (ISSB) to introduce a dedicated global standard for nature-related disclosures, warning that failure to act would weaken the credibility of global sustainability reporting frameworks.

The appeal, delivered in an open letter ahead of the ISSB’s 22 April board meeting on Earth Day, challenges a staff recommendation that favors a non-mandatory approach through guidance rather than a formal standard.

“A critical opportunity would be missed if ISSB were to ignore the latest science, private sector momentum and global policy commitments by choosing not to introduce a standard on nature.”

The letter is addressed to ISSB Chair Emmanuel Faber and board members, with copies sent to key advisory bodies across the IFRS ecosystem.

Science And Financial Risk Converge

Signatories argue that climate and nature risks are inseparable and must be addressed together in financial disclosures. Current ISSB standards focus on climate and broader sustainability risks, but omit the systemic financial exposure tied to biodiversity loss and ecosystem degradation.

“The science is clear in stressing the imperative to integrate nature and climate actions, and on the fact that reducing emissions without also protecting natural carbon stocks and sinks will prevent the world from achieving the goal of the Paris Agreement to limit global warming to 1.5°C.”

This framing reflects a growing consensus that climate targets alone cannot stabilize the global economy without parallel action on ecosystems that regulate carbon, water and food systems.

Nature-related risks are already surfacing across financial markets. According to the World Bank, biodiversity loss and ecosystem decline could generate economic losses of up to $2.7 trillion per year. The World Economic Forum has ranked biodiversity loss and ecosystem collapse among the top global risks for 2026.

The letter reinforces this financial lens.

“Investors require standardized and comprehensive nature disclosures from companies to enable informed capital allocation decisions.”

Market Momentum Outpaces Regulation

Private sector adoption of nature-related frameworks has accelerated rapidly, creating a widening gap between voluntary action and formal regulation.

More than 750 organizations have begun aligning with the Taskforce on Nature-related Financial Disclosures framework. Over 200 financial institutions have signed the Finance for Biodiversity Pledge. The European Union has already embedded biodiversity reporting through its ESRS E4 standard, while global bodies including GRI and ISO are advancing biodiversity metrics.

At the same time, technological advances are lowering barriers to measurement. Earth observation data, species monitoring tools such as eDNA, and AI-driven analytics are making nature-related metrics increasingly accessible and decision-useful.

The coalition argues that regulatory frameworks must now catch up with market reality.

“The materiality of nature is indisputable. Even if all climate targets on GHG emissions were met, the current pace of nature loss would on its own push us beyond the Paris climate limit.”

ISSB Faces Strategic Trade-Off

ISSB staff have recommended a “Practice Statement” approach, a non-mandatory guidance framework intended to support companies in disclosing nature-related risks without introducing a new standard.

The rationale centers on minimizing disruption to the adoption of existing IFRS S1 and S2 standards, which were introduced in 2023 and are still being implemented globally.

RELATED ARTICLE: ISSB Expands ‘Global Passport’ Framework to Align Sustainability Disclosure across Markets

However, critics argue that a voluntary framework risks fragmenting disclosures and slowing capital market alignment.

“Should ISSB decide to follow its staff recommendation for a non-mandatory approach to nature, this would disregard the growing recognition across business and finance of the materiality of nature, scientific recommendations for the integration of climate and nature, and global momentum of private sector concern, action and disclosure on nature.”

The letter describes such a move as regressive and out of step with both science and investor expectations.

A Case For A Global Nature Standard

The coalition proposes a standalone nature standard, aligned with existing frameworks and designed to integrate with current ISSB disclosures.

“We respectfully request that the ISSB Board develops a nature standard that builds on, supports and closely follows TNFD’s guidance and ISSB’s existing standards by integrating nature-related disclosure.”

They argue that a dedicated standard would provide a unified global framework for implementing biodiversity-related commitments under the Kunming Montreal Global Biodiversity Framework, particularly Target 15, which calls for mandatory corporate biodiversity disclosures.

A standardized approach would also reduce implementation burdens for governments and create clearer expectations for multinational companies operating across jurisdictions.

What Executives And Investors Should Watch

The ISSB decision carries direct implications for capital allocation, risk assessment and regulatory alignment.

A mandatory standard would accelerate integration of biodiversity into financial decision-making, aligning global reporting with emerging EU and international frameworks. A voluntary approach could delay comparability and leave investors navigating inconsistent disclosures.

Earth Day provides a symbolic backdrop, but the stakes extend far beyond messaging.

“In the spirit of Earth Day, we therefore call on ISSB to agree to develop a nature standard to support and enable the private sector to assess and address their nature impacts and dependencies, in the interests of business resilience and societal health.”

The outcome will shape whether nature risk becomes a core component of financial reporting or remains a secondary, unevenly disclosed factor across global markets.

ESG News Editorial Team

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