The International Sustainability Standards Board (ISSB) has published the Exposure Draft IFRS Sustainability Disclosure Practice Statement 1 Nature-related Disclosures, open for comment until February 19, 2027.

Here’s some of what the news release had to say:

• The proposals have been developed to help companies provide material information to investors about nature-related risks and opportunities.
• Companies applying the ISSB’s foundational Standard, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, are already required to disclose material information about their sustainability-related risks and opportunities that could affect their prospects, which include those related to nature. The focus of the ISSB’s nature-related disclosures project is to provide more detail on how companies can provide this information, improving the quality and comparability of nature-related financial information globally.
• The ISSB has drawn extensively from the work of the Taskforce on Nature-related Financial Disclosures (TNFD) in developing its proposals.
• The ISSB’s proposals come in the form of a Practice Statement—a stand-alone, prominent part of IFRS Foundation materials, subject to the IFRS Foundation’s full due process. From a content and drafting perspective, there is no difference between a Practice Statement and a Standard. The key difference is that a company is not required to comply with a Practice Statement to state compliance with ISSB Standards, so this approach supports high-quality nature-related disclosures but prevents disruption in companies and jurisdictions’ efforts to implement the ISSB Standards.

We covered that last aspect of the exposure draft here. The document is built in large part on the underlying definition of environmental resources as the “living and non-living components of the natural environment that have the potential to produce economic and other benefits for human activity”: the definitions of nature-related opportunities and risks arise from the entity’s relationship to those economic and other benefits. Of course, as acknowledged in the basis of conclusions, “All entities depend on or impact nature to some extent and these dependencies and impacts can give rise to various nature-related risks and opportunities throughout an entity’s value chain.” But materiality considerations limit the document’s scope to disclosures addressing “nature-related risks and opportunities that could reasonably be expected to affect an entity’s prospects, while also considering how an entity’s industry affects its nature-related risks and opportunities.” The exposure draft is surely timely in the sense that our susceptibility to such risks has seldom seemed so pervasive. But at a time when the possibility of some form of catastrophe and breakdown might seep its way into almost any forward-looking conversation (albeit not necessarily bearing the urgency of “reasonable expectations”), it also carries a risk (shared with much of the ISSB’s efforts, unfortunately), of seeming somewhat academic and trifling. Just to take one example:

• As an example of a nature-related risk arising from changes in the availability and quality of ecosystem services an entity depends on as a result of impacts on those ecosystem services by other parties, consider a coffee-production entity that depends on pollination by a wild bee population that lives around its suppliers’ coffee farms. The availability and quality of the pollination service provided by the bees depends on the forest that provides a habitat for the bees. As neighbouring farmers expand their fields—a land-use change— the extent of the forest and, as a result, the bee population is reduced. The reduction in the number of bees correspondingly reduces the pollination service the entity depends on. As a result, supplier yields could decline, which could lead to increased costs for the entity related to finding new suppliers or could result in the entity incurring higher prices due to lower coffee yields.

No doubt valid, but the example’s esoteric and highly localized nature might seem to imply that most companies will have little or nothing to disclose. Given how the ISSB Chair Emmanuel Faber has recently pivoted in his messaging (“To those who say that ESG is over and it’s all about geopolitics now, I’d say, I’d agree. We’ve never been about ESG”) it’s perhaps strange that such terms as “geopolitics” don’t occur at all in the exposure draft. The example cited above, as written, might seem like a tale of random localized misfortune, the neighbouring farmers perhaps being conscientious small businessmen doing the best they can to balance competing interests, but one imagines it might often be part of a larger and gloomier story, for example of a fecklessly regressive government rolling back environmental regulations, of long-established local land workers pushed out by corruptly-connected, barely constrained big industry (while we’re at it, maybe those industrial leaders think they’re doing the world a favour by reducing the number of bees: the little bastards sting after all, and as for the coffee, they prefer the premium imported stuff). Perhaps all of that background and colour wouldn’t ultimately be viewed as material, but it would surely help to illustrate how it’s all about geopolitics…

The opinions expressed are solely those of the author.