International Sustainability Standards Board Proposes Nature-Related Disclosure Guidelines

The International Sustainability Standards Board has introduced a new set of proposals focused on nature-related disclosures, coinciding with a United Nations climate change conference. The exposure draft, designated as IFRS Sustainability Disclosure Practice Statement 1, Nature-related Disclosures, is designed to assist commercial organizations in providing investors with material information regarding their dependencies and impacts on environmental resources.

Structure of the Practice Statement

In developing the framework, the organization evaluated various formats before opting for an IFRS Practice Statement rather than an immediate mandatory standard. This approach provides structured guidance without disrupting ongoing implementation efforts for existing standards across various global jurisdictions. Companies applying foundational rules such as IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information already address general sustainability risks, but the new draft adds specific granularity regarding nature-related dependencies like water access, river transportation, and pollination.

Leadership at the organization emphasized that avoiding siloed reporting is critical for ensuring investors can properly evaluate connections between climate-related factors, broader sustainability metrics, and standard financial statements. By integrating concepts established by the Taskforce on Nature-related Financial Disclosures, the framework stresses the importance of location-specific data and interactions with Indigenous peoples and local communities.

Metrics and Stakeholder Feedback

• Proposals require companies to disclose the specific amount and percentage of assets vulnerable to environmental risks.
• Organizations must report business activities and assets aligned with nature-related opportunities when deemed material.
• Guidance assists entities in determining how to disaggregate information appropriately across different industries.

Stakeholders have until February 19, 2027, to submit feedback on the exposure draft. Following the consultation period, the board will evaluate responses to determine whether to confirm the practice statement format or transition the requirements into a mandatory standard. Meanwhile, executives note that the proposals are structured to allow efficient alignment with other reporting frameworks, such as the Global Reporting Initiative standards and European Sustainability Reporting Standards.