IFRS builds practice statement for nature-related disclosures

The International Sustainability Standards Board (ISSB), an independent standard-setting body under IFRS Foundation, is targeting October 2026 to publish its proposals on nature-related disclosure in an exposure draft.

The ISSB has been developing the proposed practice statement to support companies provide nature-related disclosures to meet investor information needs building on the requirements in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. The statement will be subject to the same due process as a standard.

ISSB finalised its decision-making on the content of the proposals in the last week of June.

ISSB vice-chair Sue Lloyd said the ISSB drew on the Taskforce on Nature-related Financial Disclosures (TNFD) framework to develop the proposals.

The practice statement will be used together with IFRS S1 and IFRS S2 climate-related disclosures and will be a tool companies can choose to use when providing nature-related information to investors.

"The ISSB sees a real opportunity to address fragmentation in the disclosure landscape through the proposed Practice Statement by drawing on the TNFD framework and building on IFRS S1 and IFRS S2," Lloyd said.

"Proposing a Practice Statement enables us to do this without disrupting implementation and adoption of ISSB Standards around the world."

Lloyd added by developing these proposals in the form of a Practice Statement, the ISSB is leaving the door open for a Standard in the future.

"We look forward to hearing your feedback when we consult on these proposals later this year," she said.

The ISSB during its April board meeting in Beijing agreed to propose requirements for nature-related disclosures in the form of an IFRS practice statement.

ISSB chair Emmanuel Faber in April said: "Providing material nature-related disclosures is not optional; IFRS S1 already requires that. A Practice Statement will guide companies on how to provide such disclosures."

Late last year, it had said it will move into a standard-setting process on nature-related risks and opportunities, drawing on the disclosure recommendations, metrics and guidance of the TNFD.