15 Investors Push ISSB to Make Nature Reporting Standard Mandatory

Fifteen financial institutions, including Federated Hermes, Nordea Asset Management and Rabobank, have formally asked the ISSB to develop a mandatory, standalone standard for corporate nature-related reporting — and they're warning that the current voluntary route will produce fragmented, inconsistent data on material risks and opportunities.

The letter, submitted to the IFRS Foundation's International Sustainability Standards Board and released through the Finance for Biodiversity Foundation, lands one week after the ISSB opened a consultation on its proposed nature-related disclosure requirements — proposals framed as a non-mandatory Practice Statement rather than a binding standard.

The signatory list runs wider than the three headline names. It includes Achema, Achmea Investment Management, Aequo Shareholder Engagement, Cardano, Domini Impact Investments, Etica Funds – Responsible Investments, La Banque Postale Asset Management, Rathbones, Storebrand Asset Management, Swedbank Robur Asset Management, Tribe Impact Capital and Univé.

Why a Practice Statement instead of a standard?

The decision goes back to April, when the ISSB announced it would develop nature-related reporting requirements as an IFRS Practice Statement. Practice Statements are non-mandatory by design, though they still count as a form of standard setting — they go through full due process, including public consultation.

The ISSB gave two reasons for that choice at the time. First, it wanted to minimize disruption for companies still implementing the board's existing standards — the inaugural general sustainability standard IFRS S1 and climate standard IFRS S2, released in 2023. Second, the board noted that jurisdictions can make a Practice Statement, or parts of it, mandatory themselves if they choose.

The board began work on nature-related risk and opportunity disclosure standard setting last year, building on the 2023 release of S1 and S2. Its new consultation explicitly asks for feedback on whether nature-related content should instead be issued in another form — such as a standalone mandatory standard.

That's exactly the opening the investor group is walking through. The takeaway: the mandatory-standard question is formally on the table, and investors are answering it loudly.

What are the investors worried about?

The group's core concern is jurisdictional divergence. In the letter, the institutions sketch three possible paths regulators might take if no dedicated standard emerges:

• Some jurisdictions may wait for further standard setting before acting.
• Others may rely on the existing S1 and S2 standards to cover nature-related issues.
• Some could make the Practice Statement, or parts of it, mandatory on their own.

That outcome, the group warned, "would lead to fragmented reporting requirements, reducing comparability and increasing complexity for both reporting entities and investors."

The letter is direct about what investors need: "Investors need a dedicated Nature Standard to ensure consistent, comparable, and decision-useful disclosures across global markets." While the group welcomed the ISSB's work on nature disclosure and acknowledged the reasoning behind the Practice Statement format, it insisted that "a dedicated Nature Standard should remain the intended outcome," cautioning that without it "we risk fragmentation and inconsistency across different jurisdictions."

What did Federated Hermes say?

Sonya Likhtman, Stewardship Director at Federated Hermes Limited and co-chair of the FfB Public Policy Advocacy working group, made the investment case in plain terms:

"Investors require clear and coherent information from companies about their nature-related impacts, dependencies, risks and opportunities to support effective risk management and decision-making. Furthermore, addressing climate change without considering nature-related issues such as water, land use and pollution would provide an incomplete picture for investors. We therefore see significant value in the ISSB continuing to explore the development of a nature standard, responding to the widespread demand from the private sector and other stakeholders."

In short: climate-only reporting leaves a hole where water, land use and pollution data should be.

What happens next?

Beyond the call for a standard, the letter asks the ISSB to clarify three things: how consistent application across jurisdictions will actually be delivered, how disclosures will support analysis at the asset, company and portfolio level, and the process, conditions and timeline toward a dedicated nature-related standard. The group has also invited other financial institutions to add their signatures to the statement.

The milestone to watch is the ISSB consultation itself. The board has already asked respondents whether nature-related content should become a standalone mandatory standard — and the weight of investor signatures behind that answer will shape whether the Practice Statement stays guidance or hardens into rule.