• ISSB will draw on the TNFD framework to shape nature-related disclosures under IFRS S1.
• Companies may use TNFD-aligned metrics where they support IFRS S1 and do not conflict with ISSB standards.
• An exposure draft for the IFRS Practice Statement is expected in October 2026, giving boards limited time to prepare.

ISSB sharpens the path for nature reporting

The International Sustainability Standards Board is bringing nature reporting closer to mainstream corporate disclosure, with new decisions that position TNFD-aligned metrics at the centre of future IFRS S1 implementation.

Following its 24 to 25 June meeting, the ISSB published preliminary decisions on its planned IFRS Practice Statement for nature-related disclosures. The statement is expected to help companies report nature-related risks and opportunities in a consistent and decision-useful way.

The move matters for boards, investors and auditors. Nature is no longer being treated as a distant ESG theme. It is becoming part of the financial risk architecture that companies must explain to capital markets.

The ISSB confirmed in April 2026 that it would not develop a mandatory standalone nature standard at this stage. Instead, it will use an IFRS Practice Statement. That approach is less disruptive for companies already implementing IFRS S1 and IFRS S2. However, it still carries weight.

IFRS Practice Statements follow due process and public consultation. Jurisdictions may also choose to make them mandatory.

TNFD enters the IFRS reporting toolkit

The most important decision concerns metrics. The ISSB has proposed allowing companies to use Taskforce on Nature-related Financial Disclosures metrics to help meet nature-related disclosure requirements.

That permission is not open-ended. Companies may use TNFD metrics only where they support the objective of IFRS S1. They must also avoid conflicts with ISSB Standards or the Practice Statement.

Even so, the direction is clear. TNFD is not being absorbed wholesale into IFRS. Yet it is now being positioned as a central reference point for companies preparing nature disclosures.

For many preparers, this reduces uncertainty. Since TNFD released its framework in 2023, companies have started building internal processes around its recommendations. The ISSB’s latest position suggests those investments are unlikely to be wasted.

ISSB Vice-Chair Sue Lloyd said: “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. Proposing a Practice Statement enables us to do this without disrupting implementation and adoption of ISSB Standards around the world. However, by developing these proposals in the form of a Practice Statement, we are leaving the door open for a Standard in the future.”

From voluntary reporting to market expectation

The Practice Statement will not introduce new requirements by itself. Still, its practical effect could be significant.

Investor expectations often move faster than formal regulation. Once a common framework is available, asset managers, lenders and assurance providers may treat it as the baseline. That could make nature disclosure a board-level issue well before any jurisdiction makes the statement mandatory.

The ISSB has also taken a firm stance on compliance. Companies that claim compliance with the Practice Statement must meet all its requirements. They must also apply IFRS S1 and IFRS S2. Partial application will not be enough.

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That approach is designed to reduce fragmentation. It also raises the bar for governance. Companies will need clear ownership of nature-related data, risk assessment, controls and sign-off.

For finance teams, the message is practical. Nature cannot sit only with sustainability departments. It must connect with enterprise risk, strategy, internal controls and investor reporting.

A familiar model for climate teams

The ISSB has also aligned its nature risk framing with the structure used for climate. It has defined nature-related transition risks and physical risks, echoing IFRS S2’s climate architecture.

That consistency should help companies extend existing climate reporting systems. Many boards already assess physical climate exposure, transition risk and resilience planning. Nature-related dependencies and impacts can now be integrated into those processes.

The ISSB has also moved from the term “environmental assets” to “environmental resources.” The change is subtle, but important. It shifts the framing beyond balance sheet assets and toward wider dependencies on ecosystems, biodiversity, water, land and natural inputs.

What executives should do now

The next step is a decision on whether to ballot the exposure draft. Publication is targeted for October 2026.

That timeline gives companies a narrow preparation window. Boards should treat 2026 as a build year for nature-related governance and data systems.

For investors, the ISSB’s direction offers a clearer path through a crowded disclosure landscape. For companies, it raises the cost of delay.

Nature reporting is moving from voluntary ambition into practical expectation. The companies that act early will be better placed to meet investor scrutiny, regulatory pressure and future IFRS-aligned disclosure demands.