The ISSB recently announced a decision to propose requirements for nature-related disclosures in the form of an IFRS Practice Statement.

This is from the news release:

• The ISSB’s existing Standards already require companies to provide material information about all sustainability-related risks and opportunities, including nature-related risks and opportunities that could reasonably be expected to affect a company’s prospects.
• The Practice Statement would complement IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, without changing the requirements in the Standards. When a company needs to provide information about nature-related risks and opportunities in accordance with IFRS S1, the Practice Statement would explain how to do this. This form of standard-setting therefore minimises disruption, which is particularly important because companies and jurisdictions are in the process of implementing and adopting the ISSB Standards.

The ISSB had been discussing this project under the label “biodiversity, ecosystems and ecosystem services,” deciding only recently to change the title to “nature-related disclosures.” Nature-related risks and opportunities that could reasonably be expected to affect an entity’s prospects arise out of interactions between the entity and its natural environment throughout its value chain: the entity both depends on natural resources and ecosystems to generate cash flows, and affects them through its activities and outputs, contributing to their preservation, regeneration and development or (probably more commonly) to their degradation and depletion. For instance, if an entity depends on a naturally sourced commodity, its activities could be affected by the quality, availability and affordability of that item, all of which might be affected in part by its own activities or outputs. As noted, this should all find its way into reports prepared under the ISSB’s existing standards; the concern underlying the current project, in part, is that those standards might not be sufficiently explicit to address observed reporting deficiencies in areas including nature-related transition plans, location-specific information, climate-nature nexus information, and use of standardized terminology. An ISSB staff paper notes:

• Recent surveys provide further evidence that nature-related risks and opportunities are important to investors. In a 2025 Taskforce on Nature-related Financial Disclosures (TNFD) survey, a high proportion of investor respondents (92%) said that they rank nature in the top half of sustainability topics that they are concerned about, with a majority (59%) ranking it in the top three. Similarly, most investors responding to another 2025 survey view the topic of nature as growing in importance over the next five years, with 91% indicating it will be among the most important or more important than today.

The ISSB’s decision regarding a Practice Statement may sound straightforward enough, but of course such decisions are only reached after exhaustive analysis of competing possibilities, as set out in the underlying staff paper. Arguments could be (and were) being made in favour of amending the existing standards instead: for example, an expansion of IFRS S1 to include additional nature-related disclosure requirements and guidance might lead to the area being considered in a more “integrated” way, reducing the risk of a ‘silo’ of nature-related risks and opportunities, and also reducing potential duplication. A related possibility, a new stand-alone ISSB Standard, could contain specific, incremental requirements about nature-related risks and opportunities not already addressed through explicit requirements in IFRS S1, while reducing the risk of nature-related information being interpreted as being less important to users than climate-related information: this approach though would accentuate the “silo”-type risk noted above, as well as possibly disrupting the focus on the implementation and adoption of IFRS S1 and IFRS S2. “Silo”-type concerns may also apply to the use of a Practice Statement, along with concerns about the content being perceived as less important than that contained in the body of the standards. But the advantages won the day, including:

• A Practice Statement does not change or introduce any requirements in ISSB Standards and entities are not required to comply with it to state compliance with ISSB Standards as issued by the ISSB. Therefore, it does not disrupt implementation of IFRS S1 and IFRS S2.
• This form provides jurisdictions with the opportunity to decide how best to approach reporting on nature-related risks and opportunities given their jurisdictional facts and circumstances. If a jurisdiction wishes to mandate reporting on nature-related risks and opportunities, it could mandate application of the Practice Statement (by some or all entities) to support the provision of high-quality, comparable information about nature-related risks and opportunities.

A small example then of how absolutely nothing in the world of standard-setting happens by accident. Among much else, the ISSB must now settle on descriptions or definitions for such terms and concepts as “dependencies on nature,” “impacts on nature,” “ecosystem services,” “nature-related risks,” “nature-related physical risks,” “nature-related transition risks” and ‘nature-related opportunities.” Not to mention, for that matter, “nature.” Hope it all comes together fairly, uh, naturally…

The opinions expressed are solely those of the author.