ISSB Proposes Nature-related Disclosure Guidance: What Businesses Need to Know

Nature-related risks are becoming an increasingly important consideration in corporate sustainability reporting. In October 2026, the International Sustainability Standards Board (ISSB) published an Exposure Draft proposing IFRS Sustainability Disclosure Practice Statement 1, Nature-related Disclosures, inviting public feedback until 19 February 2027.

Drawing extensively on the Taskforce on Nature-related Financial Disclosures (TNFD) framework, the proposals aim to help companies provide more consistent, comparable and decision-useful information about nature-related risks and opportunities to investors. They cover how businesses depend on and affect nature, how these relationships may create risks and opportunities, and why factors such as geographical location and interactions with local communities matter.

Importantly, the proposed nature-related disclosure document is a voluntary Practice Statement rather than a mandatory IFRS Sustainability Disclosure Standard. Therefore, companies are not required to apply the proposed Practice Statement to claim compliance with ISSB Standards. IFRS S1 already requires companies to disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect their prospects, including those related to nature. The proposed Practice Statement aims to provide additional guidance that addresses investors’ information needs while minimising disruption to the ongoing global adoption of IFRS S1 and IFRS S2.

Key Takeaways from the ISSB’s Proposals

1. Nature-related risks go beyond biodiversity

Nature-related risks are not limited to biodiversity loss. They can also arise from water scarcity, land-use change, pollution and the degradation of ecosystems. For example, a manufacturer may face operational disruptions if water resources become less available, while a food company may be exposed to supply chain risks if agricultural production is affected by ecosystem degradation.

The key consideration is how a company’s dependencies and impacts on nature could affect its business prospects, including its cash flows, access to finance and cost of capital over the short, medium and long term.

2. Location matters when assessing nature-related risks

Nature-related risks are often highly location-specific. The potential effects of water scarcity, ecosystem degradation or pollution depend on where a company’s operations and supply chains are located.

The ISSB’s proposals therefore draw attention to geographical information and interactions with Indigenous Peoples, Local Communities and other affected stakeholders where relevant to understanding material nature-related risks and opportunities.

This means that companies may need to supplement a high-level, group-wide assessment with more detailed assessments of individual facilities, sourcing locations or other relevant parts of their value chains.

3. Nature and climate risks should be considered together

The ISSB aims to avoid treating nature-related disclosures as a separate reporting exercise. Its proposals are designed to complement IFRS S1 and IFRS S2, helping investors understand the connections between nature-related risks, climate-related risks and other sustainability-related matters.

For example, water stress may affect a company’s production capacity while also influencing its climate adaptation plans. Similarly, land-use changes may affect both biodiversity and the resilience of agricultural supply chains.

An integrated approach can help companies identify interconnected risks, reduce duplicated assessment efforts and develop more coherent sustainability strategies.

What Should Companies Do?

Although the proposed Practice Statement is not intended to introduce a new mandatory disclosure requirement in itself, companies can use this development as an opportunity to strengthen their existing sustainability risk management and reporting processes.

• Identify dependencies and impacts on nature

Review business activities, operational locations and key supply chains to identify relevant dependencies on natural resources and potential impacts on ecosystems.

• Assess the financial implications of nature-related risks

Consider how identified risks and opportunities could affect business operations, production costs, supply chain resilience, capital expenditure and longer-term business prospects.

• Integrate nature into existing ESG and climate risk assessments

Build on existing materiality assessments, enterprise risk management processes and climate risk assessments to identify connections between nature and climate.

• Strengthen data collection and disclosure readiness

Identify the information needed to support nature-related assessments, including operational data, facility locations, and relevant environmental indicators.

How GreenCo Can Support Companies

As nature-related considerations become more prominent in sustainability reporting, companies can take a practical, phased approach to building their readiness. GreenCo can support companies through the following areas:

• ESG Risk Assessment: Identify nature-related dependencies, impacts, risks and opportunities across business operations and supply chains, considering factors such as water availability, land use and ecosystem degradation.
• Climate and Sustainability Disclosure Advisory: Review existing disclosures against IFRS Sustainability Disclosure Standards and identify how material nature-related risks and their connections with climate-related risks can be reflected in sustainability reporting.
• ESG Data Management: Identify data gaps and strengthen the collection and documentation of nature-related information to support risk assessment and disclosure.

The ISSB’s proposals signal a further step towards more connected and decision-useful sustainability disclosures. For companies, the priority is not simply to prepare for another reporting framework, but to understand how their relationships with nature may affect business resilience and long-term prospects.

Looking to strengthen your company’s ESG risk assessment and sustainability disclosure readiness? Contact GreenCo to learn how we can support your organisation.

Visit the IFRS Foundation’s Nature-related Disclosures consultation page for further details of the proposals and related materials.

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