More than 730 organisations, including asset managers running USD 22.4 trillion, have committed to reporting on nature using the TNFD framework. However, in April 2026, the International Sustainability Standards Board (ISSB), the body that writes the global sustainability reporting standards, decided not to turn that framework into a standard of its own.
It’s easy to read that as a retreat, and as a licence to leave nature off the agenda for another year. It is neither. The requirement to report material nature risks already exists and has not moved. What has moved is how companies will be told to meet it, and that makes the next two years harder to plan for, not easier.
Four reasons nature belongs in front of a board now:
- The obligation already exists.
- The data takes years to develop.
- Context differs across markets.
- It is rooted in financial reporting, not sustainability.
Before exploring these reasons in more detail, let’s look at the background.
What was decided
The ISSB sets the global standards for sustainability reporting: IFRS S1, which covers sustainability generally, and IFRS S2, which covers climate.
In April the ISSB decided that nature would be handled through guidance sitting alongside these two standards rather than developing a new standard. The formal name for that guidance is an IFRS Practice Statement. In July the Board agreed to publish a draft for consultation, with all twelve members in favour. The draft is now expected in October, with 120 days for stakeholders to respond.
The guidance is optional. The reporting is not.
This is where the headline misleads. IFRS S1 already requires a company to disclose anything that could reasonably be expected to impact it. This includes a company’s cash flows, access to finance, and cost of capital. Nature was never carved out of that. If a company’s water supply, land use, or reliance on a functioning ecosystem is significant enough to affect the business, S1 already requires it to be reported.
What has been missing is authoritative guidance on how to find those risks and describe them. That is what is now being consulted on.
Emmanuel Faber, who chairs the ISSB, put it plainly in announcing the decision: “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.”
The choice on offer is about method, not obligation. So any company that reads April’s decision as permission to ignore nature has misread it.
The harder part: it will not arrive everywhere at once
A standard travels with the rest of the rulebook. When a country adopts IFRS S1 and S2, it takes the package.
Guidance does not work that way. Each country decides separately whether to adopt it. So over the next few years some markets will have it and others will not, while the underlying S1 requirement applies in all of them.
For a bank or insurer operating across several countries, that is a practical problem. The obligation is the same everywhere; the instructions for meeting it are not. And in Europe, companies caught by the EU’s sustainability reporting rules already report on nature through a different framework again.
The result is one requirement met in three different ways across a single group, and a predictable set of questions from auditors, regulators, and investors about why the answers do not match. That is a governance problem before it is a reporting one.
What the guidance is expected to cover
The draft is not yet public, so what follows comes from the ISSB’s published decisions rather than from the text.
It is expected to build on the TNFD framework, and cover land use, pollution, resource extraction, water, and biodiversity rather than biodiversity alone. Three things stand out for anyone who will have to apply it.
- Nature risk is local in a way climate risk is not, such as a water-stressed river basin, a protected area, or a region where forest is being cleared. The guidance is expected to ask companies to report what share of their assets sit in exposed places. Most institutions do not hold their data at that level of geographic detail, and this is likely to be a real constraint in the first year.
- Climate and nature inherently interact, in ways where addressing one can create exposure to the other. Anyone who has looked closely at the land and water footprint of a large renewable energy project, for example, will recognise exactly this problem.
- Guidance is also expected on indigenous peoples and local communities. This is an area where the TNFD framework is considerably further ahead than most institutions’ own processes.
The four reasons in more detail
Now to the four reasons why boards must be considering the impacts of nature.
1. The obligation already exists. It does not begin when the guidance is finalised. A company applying IFRS S1 that concludes nature is material to its business is required to say so now. A board that has this filed under 2027 is already behind.
2. The data takes years to develop. Knowing where your exposures physically sit is a data programme, not a reporting exercise. If the honest answer today is that nobody knows, closing that gap is measured in years. This makes the decision about when to start a board decision rather than an operational one.
3. Context differs across markets. Uneven adoption means a group either chooses one approach and applies it everywhere, or accepts that its disclosures differ by country. Both are defensible. Neither should be settled by accident, several layers down.
4. It is rooted in financial reporting, not sustainability. IFRS S1 is a financial reporting standard. Anything disclosed under it carries the same governance, controls, and assurance expectations as the accounts themselves. Nature reporting that sits only with a sustainability team, and outside of that control environment, is a structural weakness, and the kind that tends to be found from outside the organisation rather than inside it.
There are 120 days to shape it
The consultation presents a real opportunity rather than a formality, because the ISSB itself is not settled internally. When it agreed definitions for nature-related physical and transition risks in June 2026, eight of its twelve members were in favour, against unanimity on everything else decided that day. Definitions are exactly the sort of thing a well-argued response can still move.
That matters most for institutions in emerging markets, where the location-data expectation will bite hardest and the infrastructure to meet it is thinnest.
Responding costs a few days of senior time. Applying a definition that does not fit your portfolio costs considerably more, for considerably longer.
Redefine advises financial institutions and development finance partners on sustainability disclosure, framework design and the governance behind them, and supports boards and executive committees working through decisions of this kind. If you are working out what the ISSB’s nature proposals mean for your reporting, we are happy to talk it through: hello@redefine-finance.com
Bibliography
IFRS. (2026). ISSB agrees on the proposed way forward for nature-related disclosures.
ESG Today. (2026). ISSB decides to develop non-mandatory nature-related reporting requirements.
Linklaters Sustainable Futures. (2026). ISSB to develop Practice Statement on nature disclosures rather than new standalone standard.
IFRS. (2026). ISSB Update, June 2026.
IFRS. Nature-related Disclosures work plan.
KPMG. (2026). ISSB nature reporting.
Socious. (2026). ISSB Nature Practice Statement 2026.
TNFD. TNFD Adopters.
