ISSB Opens Consultation on Nature Disclosure Through Feb 19 2027

The IFRS Foundation's International Sustainability Standards Board released the initial exposure draft of its proposed nature-related disclosure requirements and opened a consultation that closes February 19, 2027. The draft will determine whether the framework becomes a non-mandatory Practice Statement or a standalone mandatory standard.

Recyclers, waste managers, mineral processors and other operators in the circular economy will inherit the new architecture. It mirrors the IFRS S1 general sustainability and IFRS S2 climate standards the foundation published in June 2023.

The draft takes the form of a non-mandatory IFRS Practice Statement, the ISSB said. The consultation will also ask respondents whether the board should issue nature-related content in another form, including a standalone mandatory standard.

The ISSB launched in November 2021 to develop IFRS Sustainability Disclosure Standards. In April, the board said it had elected the Practice Statement route rather than a binding standard, citing the need to limit disruption for companies now applying IFRS S1 and S2.

No direct mandates from the foundation. Practice Statements share the full due process of standards, including public consultation, and jurisdictions may choose to apply them as binding rules within their reporting regimes.

ISSB Vice-Chair Sue Lloyd said: "We recognise that companies are deeply engaged with applying IFRS S1 and IFRS S2 for the first time. What we're proposing is to balance the need to give markets time to implement the ISSB Standards well, with the demand from investors for information on nature."

The framework operates as a complement, not a replacement. IFRS S1 already obliges companies to disclose material information on all sustainability-related risks and opportunities, including nature. The exposure draft treats nature the way IFRS S2 treats climate, specifying how the general obligation works for biodiversity, water and land.

What does the draft require companies to report?

The exposure draft sets out requirements covering how a company has responded, and plans to respond, to nature-related risks and opportunities in its strategy and decision-making. Companies would also disclose the resilience of their strategy and business model to uncertainties from nature-related risks.

Operators would report the amount and percentage of assets or business activities vulnerable to nature-related risks, and the share aligned with nature-related opportunities. Nature-related targets would require disclosure of what the target covers, location-specific aspects, objectives, and any link to law or regulation.

How does the framework build on the TNFD?

The ISSB drew extensively from the Taskforce on Nature-related Financial Disclosures in building the draft. The board said companies that have applied the TNFD framework will be well positioned to use the Practice Statement.

The TNFD ended its own technical work program after the ISSB announced plans to develop nature-related rules, turning the standard-setting work over to the IFRS Foundation.

TNFD Co-Chair David Craig said: "I welcome the publication of the ISSB's Exposure Draft on nature-related disclosures, which draws extensively on the TNFD's framework. This milestone builds on the momentum achieved over the past five years by TNFD in driving better nature-related reporting and is a testament to both the progress made and the significant demand for high-quality nature-related information."

The board also worked to align the Practice Statement with the Global Reporting Initiative Standards and the European Sustainability Reporting Standards, so that companies running parallel reporting tracks can do so without duplicating effort.

How does the framework reach recyclers?

ISSB Chair Emmanuel Faber anchored the rationale in operational dependencies that apply across the circular economy.

"Whether it is access to water for production, to rivers for transportation or to bees for pollination, companies around the world depend on nature," Faber said. "When a company's access to these environmental resources is threatened, the company can face risks and opportunities that affect its prospects. We believe companies that comply with an IFRS Sustainability Practice Statement on nature-related disclosures will be best placed to provide high-quality reporting to their investors."

Sorting facilities, paper mills, metal smelters and composting plants draw directly on water, land and pollinator-dependent feedstocks. Under the draft, those operators would quantify the share of assets exposed to nature-related risks and disclose their mitigation strategies.

What happens next?

The consultation closes February 19, 2027. Respondents will weigh in on the substance of the draft and on the form question, a binding standard versus a Practice Statement. The ISSB's next move, and the jurisdictions that opt in, will decide whether nature disclosure becomes a routine line item in the annual report or remains voluntary guidance.