The proposed Practice Statement is voluntary on paper, but it asks for location-specific numbers most nature reporting has never had to produce. Comments close February 19, 2027.
Key Takeaways
For three years, nature reporting has been the voluntary cousin of climate disclosure: a framework companies could adopt, a handful of recommended disclosures they could pick from, and no standard setter behind it. That changed this month. The International Sustainability Standards Board has put a nature-related proposal out for comment, built on the same architecture as its climate standard and drawn heavily from the Taskforce on Nature-related Financial Disclosures. Its most demanding line is not about biodiversity in the abstract. It asks a company to say how much of its business sits in places where nature can fail it.
The exposure draft is formally titled IFRS Sustainability Disclosure Practice Statement 1, Nature-related Disclosures. The ISSB opened a 120-day comment period that runs to February 19, 2027. The IFRS Foundation frames it as help with an obligation that already exists: companies applying IFRS S1 must disclose material sustainability risks and opportunities, nature-related ones included, but S1 has no nature-specific requirements. The draft is accompanied by illustrative examples on disclosing the location of assets and activities.
According to ESG Today, the proposed disclosures cover how a company responds to nature-related risks and opportunities in its strategy and decisions, the resilience of its strategy and business model to nature-related uncertainties, the amount and percentage of assets or business activities vulnerable to nature-related risks, and any nature-related targets, including their location-specific aspects and whether laws or regulations informed them. ISSB Chair Emmanuel Faber put the logic plainly: "Whether it is access to water for production, to rivers for transportation or to bees for pollination, companies around the world depend on nature."
The choice of format matters. A Practice Statement is not a Standard, so a company does not have to comply with it to state compliance with ISSB Standards, and Vice-Chair Sue Lloyd acknowledged that companies "are deeply engaged with applying IFRS S1 and IFRS S2 for the first time." But jurisdictions may choose to make it mandatory, and the consultation explicitly asks whether the content should be issued as a Standard instead. A KPMG summary of the board's earlier decisions adds that companies claiming compliance with the Practice Statement would need to apply all of its requirements, with relief from comparative information in the first year.
Most climate inventories can be built from invoices and meter readings. Nature risk cannot. Whether a plant is exposed depends on the river it draws from, the watershed it shares and the ecosystems its suppliers rely on, so the asset-vulnerability disclosure forces a company to map its operations against places rather than categories. KPMG notes that the ISSB is not proposing cross-industry nature metrics. It plans to update the nature-related requirements in SASB industry standards instead and lets companies refer to TNFD metrics as guidance. Both physical and transition risks are in scope, and the draft adds guidance on risks arising from the relationship between nature and Indigenous peoples and local communities.
That puts the burden on method. The TNFD's answer is its LEAP approach (Locate, Evaluate, Assess, Prepare), which it overhauled for the first time on October 13. As ESG Today reported, LEAP 2.0 adds guidance on assessing risks and opportunities, measuring the state of nature, environmental crime, and nature in transition planning. The TNFD is ending its technical work program, the ISSB plans to draw on LEAP, and an ISO standard based on it is in development. The method companies use for the Locate step is likely to become the one auditors eventually test.
Interest is not the problem. The TNFD now counts 836 organizations in 57 countries committed to aligned reporting, a 14 percent increase in less than a year. Committed financial institutions represent more than $26 trillion in assets under management, and listed adopters account for over $10.5 trillion in market capitalization. More than 1,100 organizations are making at least one TNFD-aligned disclosure.
Depth is the problem. Those disclosers average 8 of the 14 recommended disclosures, which means a typical report leaves out close to half of what the framework asks for. A voluntary framework tolerates that. A Practice Statement that has to be applied in full to claim compliance does not, and the gaps most likely to show are the location-specific ones, because they require site data that sustainability teams rarely hold. BDO notes that the ISSB is presenting its approach in a live webinar at the COP17 biodiversity conference on October 22, and that the proposals are designed to support proportionate implementation. Proportionate is not the same as optional, and investors with $26 trillion behind the TNFD will read the first reports closely.
There is also a climate link that most companies are already building. KPMG notes the draft includes targeted guidance on the connected information requirements between IFRS S1 and IFRS S2, and the resilience disclosure mirrors the one in the climate standard. Companies with a working climate scenario process have a frame to extend. Those without one will be building two at once.
Report
A Practice Statement turns binding only when local regulators adopt it, so the nature draft will land jurisdiction by jurisdiction. Enhesa's report tracks the disclosure mandates and enforcement priorities reshaping global EHS programs.
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Report
The nature draft extends the climate risk reporting companies are building now. Watershed's report explains SB 253 and SB 261, who is covered, the timelines, and how to approach the data collection that a nature disclosure will build on.
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The draft asks how resilient your strategy is when water for production or rivers for transport fail. Motorola Solutions' report examines what separates organizations that keep operating through disruption from those that do not.
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