ISSB Proposes Nature-Related Disclosure Guidance, Leaving Door Open to New Standard

Key Takeaways

• ISSB Proposes Nature-Related Disclosure Guidance: The board has published an exposure draft intended to improve the quality and comparability of material nature-related financial information provided to investors.
• Existing Disclosure Requirements Remain in Place: Companies applying IFRS S1 are already required to disclose material sustainability-related risks and opportunities, including those related to nature.
• Practice Statement Would Remain Optional: Companies would not need to follow the proposed guidance to claim compliance with ISSB Standards.
• ISSB Considers a Formal Standard: The board is seeking feedback on whether to finalize the guidance as a Practice Statement or issue it in another form, potentially as a new standard.

Deep Dive

The International Sustainability Standards Board has proposed new guidance on nature-related financial disclosures, but companies would not have to follow it to claim compliance with the board's sustainability reporting standards.

That decision sits at the center of an exposure draft published in October 2026. The ISSB wants companies to provide investors with more consistent information about nature-related risks and opportunities, while avoiding additional requirements that could complicate the adoption of its existing standards.

The proposed document, IFRS Sustainability Disclosure Practice Statement 1 Nature-related Disclosures, draws extensively on work by the Taskforce on Nature-related Financial Disclosures (TNFD). It would provide more detailed guidance on reporting information already covered by the ISSB's foundational sustainability standard, IFRS S1.

The board has not settled on the document's final status. It is asking stakeholders whether the guidance should remain a Practice Statement or be issued in another form, potentially as a formal standard. Comments are due February 19, 2027.

The Requirements Already Exist

Under IFRS S1, companies applying the standard must disclose material information about sustainability-related risks and opportunities that could affect their prospects. Nature-related matters are already included in that obligation. The ISSB's latest proposal is concerned with how companies fulfill it.

The board wants to improve the quality and comparability of nature-related financial information, giving companies more detailed guidance on what to disclose and how to present it to investors. The underlying requirement to report material sustainability-related information would remain unchanged.

The ISSB has relied extensively on the TNFD in developing the proposals. The task force's work provides an established basis for examining how businesses depend on and affect nature, and the financial risks and opportunities associated with those relationships.

The ISSB is bringing that work into its own reporting framework rather than establishing a separate set of nature-related disclosure requirements at this stage.

For companies already applying IFRS S1, the proposed guidance would provide additional direction on an obligation they are expected to meet. Whether that direction should itself become a requirement is a separate matter, and one the board has deliberately left open.

A Different Kind of IFRS Document

The difference between a Practice Statement and a Standard is unusually narrow in some respects and substantial in another. According to the IFRS Foundation, both undergo the same due process, and there is no difference in how their content is developed or drafted. A Practice Statement would also occupy a prominent, stand-alone position within the foundation's materials.

What changes is the consequence of not following it. A company would not be required to comply with the proposed Practice Statement to declare compliance with ISSB Standards. The document could therefore influence how companies prepare their nature-related disclosures without becoming another condition they must satisfy.

The ISSB says this approach is intended to support high-quality reporting while avoiding disruption to companies and jurisdictions implementing its existing standards. That consideration has shaped the proposal. The board is seeking more comparable information across companies, but it has chosen a form of guidance that would not require companies to adopt the additional material.

The consultation could change that decision. The ISSB is explicitly asking whether the proposed content should be finalized as a Practice Statement or issued differently, including as a Standard.

The choice will determine the status of the additional guidance within the ISSB framework. It will not remove the nature-related disclosure obligations that already exist under IFRS S1.

The Detail Behind the Disclosures

The consultation includes accompanying guidance with illustrative examples concerning disclosures about the locations of companies' assets and activities. Such information can help explain the nature-related circumstances in which a business operates. The examples give companies a practical reference for considering how location-related information might be disclosed.

The IFRS Foundation has also published a Basis for Conclusions setting out the background and reasoning behind the proposals, along with supplemental reference materials.

The exposure draft contains specific questions for respondents. Stakeholders can submit their views through an online survey, the ISSB's preferred method, or through a comment letter. They do not need to submit both.

The survey uses the same questions as the exposure draft, and respondents are not required to answer every question. Comment letters will be published on the IFRS Foundation's website unless confidentiality is requested and granted.

The consultation will remain open for 120 days, closing on February 19, 2027.

The ISSB will then have to decide whether to retain the flexibility of a Practice Statement or give the nature-related material a different status. In the meantime, companies applying IFRS S1 remain responsible for disclosing material nature-related financial information, regardless of how the new guidance is ultimately issued.

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