ISSB Moves Beyond Climate: New Nature-Related Disclosure Proposals Put Biodiversity Risk in Focus

October 29, 2026-

The global sustainability reporting landscape is expanding beyond climate change. The International Sustainability Standards Board (ISSB) has published a new exposure draft proposing guidance to help companies disclose material risks and opportunities linked to nature, biodiversity and ecosystems.

Released on October 22, 2026, the proposed IFRS Sustainability Disclosure Practice Statement 1: Nature-related Disclosures aims to help businesses provide investors with more consistent and comparable information about their dependence on nature and the financial implications of environmental degradation.

The proposals build on the ISSB’s existing sustainability reporting framework and draw extensively on the Taskforce on Nature-related Financial Disclosures (TNFD). The public consultation remains open until February 19, 2027.

What Are the ISSB Nature-Related Disclosures?

The ISSB nature-related disclosures are proposed guidance designed to help companies explain how nature-related risks and opportunities could affect their business prospects.

These risks can arise from biodiversity loss, water scarcity, ecosystem degradation, deforestation and changes in land use. They can affect companies through disrupted supply chains, higher operating costs, reduced access to essential resources and changes in market or regulatory expectations.

For example, a food manufacturer that depends on agricultural commodities may face supply disruptions if soil quality deteriorates or water becomes scarce. A mining company may face operational and regulatory risks if its activities affect sensitive ecosystems. A manufacturer that relies on water-intensive production may also face higher costs or restrictions in water-stressed regions.

Investors need this information to assess how environmental dependencies could affect a company’s long-term financial performance, resilience and growth prospects.

The proposed Practice Statement is intended to help companies report these issues more consistently, rather than relying exclusively on fragmented voluntary disclosures or company-specific sustainability reports.

What Does the ISSB Exposure Draft Propose?

The exposure draft outlines how companies could provide decision-useful information about nature-related risks and opportunities. Its proposed disclosures cover several areas.

1. Business Strategy and Decision-Making

Companies would explain how they identify and respond to nature-related risks and opportunities when developing their strategies and making business decisions.

This could include decisions about sourcing materials, choosing production locations, managing water resources and investing in technologies that reduce pressure on ecosystems.

The objective is to help investors understand whether nature-related considerations are integrated into business planning or treated as a separate sustainability initiative.

2. Business Model Resilience

The proposals would help investors assess how resilient a company’s business model and strategy are to uncertainties associated with nature-related risks.

Businesses may need to consider whether they can continue operating if access to water becomes restricted, biodiversity loss affects agricultural productivity, or environmental changes disrupt key suppliers.

Disclosing these vulnerabilities could help investors evaluate the robustness of a company’s operating model and its ability to respond to environmental pressures.

3. Exposure of Assets and Business Activities

Companies would provide information about the assets and business activities exposed to material nature-related risks, including relevant amounts and percentages.

Location is particularly important. Two facilities in the same industry can face very different risks depending on their proximity to water-stressed areas, sensitive habitats or ecosystems undergoing degradation.

Location-specific information can therefore help investors understand where a company’s environmental dependencies are concentrated and which operations may be most vulnerable.

4. Nature-Related Targets

The draft also addresses disclosures about nature-related targets established by companies.

Businesses would explain what their targets cover, their objectives and relevant location-specific details. They would also provide information about whether and how those targets have been informed by applicable laws or regulations.

This could help investors distinguish clearly defined environmental objectives from broad sustainability commitments that are difficult to evaluate.

These proposals are intended to improve the quality and comparability of nature-related financial information. They remain subject to consultation and may change before the ISSB finalises its approach.

How TNFD Connects to the ISSB’s Nature Reporting Proposals

The Taskforce on Nature-related Financial Disclosures has played an important role in developing a framework for businesses to assess and report their nature-related dependencies, impacts, risks and opportunities.

The ISSB has drawn extensively on the TNFD framework while developing its proposed guidance. This builds a connection between existing nature-reporting practices and the investor-focused sustainability disclosure system developed by the IFRS Foundation.

Companies that have already adopted TNFD-aligned processes may have a useful foundation for preparing nature-related disclosures under the proposed Practice Statement.

However, using the TNFD framework does not automatically establish compliance with every proposed ISSB disclosure. Businesses will need to assess the final requirements and applicable reporting obligations before determining what additional work is necessary.

Why Biodiversity and Nature-Related Risks Matter to Investors

Nature is not simply an environmental issue. Many businesses depend on functioning ecosystems for essential resources, production inputs and reliable supply chains.

Water availability, healthy soils, pollination, forests and other ecosystem services support economic activity across agriculture, food production, manufacturing, energy, infrastructure and numerous other sectors.

When these systems deteriorate, companies may face increased costs, operational interruptions, supply shortages, regulatory exposure and reputational damage.

Investors, meanwhile, need reliable information to evaluate which businesses are vulnerable and how effectively management is responding.

More consistent nature-related reporting could help investors compare companies, identify concentrated exposures and understand how environmental risks interact with climate-related risks and broader business strategy.

For companies, better disclosure can also reveal opportunities to improve resource efficiency, strengthen supply chains, invest in nature-positive solutions and reduce exposure to environmental disruption.

The ISSB’s initiative reflects a wider shift towards treating material environmental dependencies as part of corporate risk management and investor decision-making, rather than viewing them solely as corporate social responsibility concerns.

Is the ISSB’s Nature-Related Disclosure Guidance Mandatory?

No. The proposed Practice Statement is not mandatory under the ISSB framework as currently proposed.

This distinction is important for companies preparing their sustainability reporting strategies.

The ISSB’s foundational standard, IFRS S1, already requires companies applying it to disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect their prospects. These risks can include those related to nature.

The proposed Practice Statement is intended to provide more detailed guidance on how companies can report material nature-related information. However, the IFRS Foundation states that companies would not be required to follow the Practice Statement to claim compliance with ISSB Standards.

The ISSB is also consulting on whether the final nature-related material should remain a Practice Statement or take another form, such as a separate standard. Individual jurisdictions could also decide to require its application under their own reporting rules.

Companies should therefore distinguish between existing disclosure obligations under IFRS S1, the proposed nature-related guidance and any additional requirements imposed by local regulators.

Key Dates and Facts Companies Should Know

• October 22, 2026: The ISSB published its exposure draft on nature-related disclosures.
• February 19, 2027: The consultation period is scheduled to close.
• TNFD framework: A major source informing the ISSB’s proposed approach.
• IFRS S1: The existing general sustainability disclosure standard already covers material sustainability-related risks and opportunities, including nature-related matters.
• IFRS S2: The existing climate-related disclosure standard, which the proposed nature-related guidance is designed to complement.

The ISSB will consider stakeholder feedback before deciding how to proceed with the proposals. Companies should monitor the consultation and any subsequent decisions rather than assume the exposure draft represents a final reporting requirement.

How Companies Can Prepare for Nature-Related Financial Reporting

Businesses do not need to wait for the consultation to conclude before reviewing their exposure to nature-related risks. Several practical steps can help establish a foundation for future reporting.

Map Nature Dependencies and Risks

Identify where operations and supply chains depend on water, land, biodiversity and ecosystem services. Prioritise assets and activities where environmental disruption could have a material effect on business prospects.

Review Existing Sustainability Disclosures

Assess whether current sustainability reporting adequately addresses material nature-related risks and opportunities. Companies already applying IFRS S1 should review how these matters are identified, assessed and disclosed.

Evaluate TNFD Alignment

Review the TNFD framework and determine whether existing risk-assessment and reporting processes could support the proposed ISSB approach. Identify any gaps between current practices and the information contemplated by the exposure draft.

Strengthen Location-Specific Data

Nature-related risks can vary substantially by location. Companies should evaluate whether they have reliable information about the environmental conditions surrounding key facilities, suppliers and other important business activities.

Assign Clear Governance Responsibilities

Clarify who is responsible for identifying, assessing and reporting nature-related risks. Sustainability, finance, risk, procurement and operational teams may need to work together to connect environmental information with business decisions and investor reporting.

Monitor the Consultation and Local Regulations

The exposure draft is still under consultation. Companies should follow the ISSB’s decisions and review relevant jurisdictional requirements before determining the scope and timing of any formal implementation.

What the ISSB’s Nature Reporting Initiative Means for ESG

The ISSB’s nature-related disclosure proposals mark an important development in the evolution of global sustainability reporting.

By drawing on the TNFD framework and building on IFRS S1 and IFRS S2, the Board aims to make material nature-related information more useful and comparable for investors.

The immediate priority for businesses is to understand their environmental dependencies, assess potential financial implications and prepare for the possibility of more detailed disclosure expectations.

The final outcome will depend on consultation feedback and the ISSB’s subsequent decisions. But the direction is clear: biodiversity, water, ecosystems and other nature-related factors are receiving greater attention in discussions about corporate resilience, financial risk and long-term value creation.

For businesses and investors alike, the challenge is moving from broad environmental commitments towards credible, decision-useful information about how nature affects business performance.

Follow ESG World News for the latest developments in sustainability reporting, ESG regulation, climate finance and responsible business.

 

SEBI BRSR Core Disclosure: What India’s Top 1,000 Listed Companies Need to Know