ISSB proposes nature-related disclosures under IFRS S1 with no effective date

The International Sustainability Standards Board has proposed nature-related disclosure requirements for companies applying IFRS S1, with a consultation running to 19 February 2027. The proposals carry no effective date, no enforcement mechanism and no company-size threshold, ESG News reported.

The draft addresses material information about nature-related risks and opportunities that could affect a company's prospects, and how dependencies on nature and impacts on nature create them. It asks that nature reporting be connected to climate, to other sustainability matters and to financial statement information.

Emmanuel Faber, the ISSB's chair, put the case in production terms. "Whether it is access to water for production, to rivers for transportation or to bees for pollination, companies around the world depend on nature," he said. When access to those resources is threatened, companies face risks and opportunities that affect their prospects, and those applying an IFRS Sustainability Practice Statement on nature-related disclosures would be best placed to give investors high-quality reporting.

The proposals would arrive as a Practice Statement, a stand-alone part of the IFRS Foundation's materials that would go through the foundation's full due process. Its content and drafting would not differ from a Standard, according to ESG News, but the compliance route would: companies could claim compliance with the ISSB Standards without following the Practice Statement.

The board drew extensively on the Taskforce on Nature-related Financial Disclosures, emphasising location and interactions with Indigenous Peoples, Local Communities and affected stakeholders. It also considered efficient use alongside Global Reporting Initiative Standards and European Sustainability Reporting Standards, ESG News reported.

"We recognise that companies are deeply engaged with applying IFRS S1 and IFRS S2 for the first time," said Sue Lloyd, the ISSB's vice-chair. "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 Taskforce on Nature-related Financial Disclosures counted 836 adopters in this publication's 16 October report, with committed financial institutions representing more than $26 trillion in assets under management.

The FCA's final rules, which extend comply-or-explain treatment to ISSB-aligned UK standards, cover accounting periods beginning 1 January 2027, with initial reports due in 2028, per this publication's reporting.