• ISSB will introduce nature-related disclosure guidance via an IFRS Practice Statement, building on IFRS S1 and S2
• Approach aligns with TNFD framework while avoiding disruption to companies already implementing sustainability standards
• Exposure draft expected in October 2026, opening global consultation on nature reporting requirements

The International Sustainability Standards Board has agreed on a structured path to formalise nature-related disclosures, advancing efforts to integrate biodiversity and ecosystem risks into global financial reporting.

At its April board meeting, the ISSB confirmed it will propose guidance through an IFRS Practice Statement rather than a new standalone standard. The move reflects a deliberate attempt to expand disclosure expectations without disrupting companies already working to implement IFRS S1 and IFRS S2.

The decision comes as regulators and investors intensify focus on nature-related risks, including biodiversity loss, water stress and land degradation. These risks are increasingly seen as financially material, particularly across agriculture, energy, infrastructure and extractive sectors.

Building On Existing Standards Without Adding Complexity

The ISSB’s current standards already require companies to disclose material sustainability-related risks and opportunities. This includes nature-related exposures where they could reasonably affect financial performance or long-term prospects.

The proposed Practice Statement is designed to clarify how companies should apply those requirements in practice. It will sit alongside IFRS S1, which sets general sustainability disclosure requirements, and IFRS S2, which focuses on climate-related risks.

By choosing this route, the ISSB is signalling a preference for continuity over expansion. Many jurisdictions are still in early stages of adopting the ISSB framework. Introducing a new standard at this point could slow adoption or create reporting friction.

Instead, the Practice Statement will provide interpretive guidance while maintaining alignment with existing rules. For companies, this means clearer expectations without the burden of a new compliance layer.

Anchored In TNFD Framework

The content of the proposed guidance will draw heavily on the Taskforce on Nature-related Financial Disclosures framework. TNFD has emerged as the leading voluntary framework for assessing and reporting nature-related risks.

By aligning with TNFD, the ISSB is working to consolidate fragmented reporting approaches into a single global baseline. This is a key priority for investors, who have raised concerns about inconsistent data and limited comparability across markets.

At the Beijing meeting, the board discussed how TNFD concepts can be adapted into IFRS-aligned disclosures. This includes identifying dependencies on natural systems, measuring impacts and assessing financial risks linked to ecosystem degradation.

The aim is to ensure that nature-related disclosures are decision-useful for capital markets, not just descriptive.

Chair Emphasises Mandatory Nature Disclosure Expectations

ISSB Chair Emmanuel Faber made clear that companies are already expected to disclose material nature-related risks under existing standards. “Providing material nature-related disclosures is not optional; IFRS S1 already requires that. A Practice Statement will guide companies on how to provide such disclosures.”

He also highlighted the strategic role of the Practice Statement in shaping future regulation. “Applying the Practice Statement would have the full effect of an ISSB Standard for companies applying it. At the same time, it provides the ISSB with a pathway to a standard-based outcome in the future.”

The comments reflect a broader shift in sustainability reporting, where voluntary guidance is increasingly used as a stepping stone toward mandatory global standards.

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

Consultation Phase Signals Broader Policy Direction

The ISSB plans to release an exposure draft in October 2026, allowing stakeholders to provide feedback on both the content and structure of the proposed guidance.

This consultation will test whether a Practice Statement is sufficient or whether stronger, standard-based requirements are needed. It will also give regulators, companies and investors an opportunity to shape how nature risks are defined and disclosed at scale.

For policymakers, the initiative aligns with growing international momentum around nature finance, including efforts linked to the Global Biodiversity Framework.

What Executives And Investors Should Watch

For C-suite leaders and investors, the message is direct. Nature-related risk disclosure is moving from emerging topic to core financial consideration.

Companies that rely on natural resources or operate in sensitive ecosystems will face increasing scrutiny. Supply chain exposure, water usage and land impact will become central to risk assessments.

Financial institutions are also expected to integrate nature risk into lending and investment decisions. Standardised disclosures will make these risks more visible and comparable.

The ISSB’s approach suggests that global reporting frameworks are entering a consolidation phase. Climate reporting set the foundation. Nature is now following on a similar path, with clearer expectations and growing regulatory backing.

As adoption spreads, companies that act early will be better positioned to manage risk, attract capital and navigate tightening disclosure requirements.

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