The International Sustainability Standards Board has agreed that companies may use Taskforce on Nature-related Financial Disclosures metrics when preparing nature related reporting under its forthcoming IFRS Practice Statement.
The ISSB, which sits within the IFRS Foundation, has been developing guidance to help companies disclose material nature related risks and opportunities under the global sustainability reporting framework. The board has tentatively decided that the planned Practice Statement should allow entities to refer to and consider TNFD disclosure metrics, provided they support the objective of IFRS S1 and do not conflict with IFRS Sustainability Disclosure Standards or the Practice Statement.
Eleven of 12 ISSB members agreed with the decision during the board’s nature related disclosure discussions. The board also tentatively decided to retain the reference to the CDSB Framework Application Guidance as a source of guidance in IFRS S1.
The decision forms part of the ISSB’s work on a non-mandatory IFRS Practice Statement for nature related disclosures. An exposure draft is expected later this year, with the Practice Statement intended to guide companies on providing material information about nature related risks and opportunities without immediately creating a standalone mandatory nature standard.
IFRS S1 already requires companies to disclose material information about sustainability related risks and opportunities that could reasonably be expected to affect their prospects. Nature related risks fall within that broad requirement where they are financially material. The Practice Statement is intended to help companies provide that information in a more consistent and decision useful way.
The TNFD framework has become one of the main reference points for nature related assessment and disclosure. It is designed to help organisations report and act on dependencies, impacts, risks, and opportunities linked to nature. The ISSB’s decision to permit use of TNFD disclosure metrics gives companies a clearer bridge between voluntary nature frameworks and investor focused sustainability reporting.
The board’s staff papers stress that TNFD metrics are not being made mandatory through this route. Companies may refer to them where they assist in meeting IFRS S1 objectives and where they do not conflict with ISSB standards. TNFD materials are designed to support several approaches to materiality, while the ISSB’s standards focus on information needed by users of general purpose financial reports.
Nature reporting is becoming more disciplined after several years in which companies focused heavily on climate. Climate disclosures are now more established through IFRS S2, the European Sustainability Reporting Standards, transition plan requirements, investor questionnaires, and regulatory pressure. Nature remains less mature, but the commercial exposure is increasingly visible in food, agriculture, textiles, mining, construction, pharmaceuticals, insurance, finance, and consumer goods.
Procurement and ESG teams are already dealing with stronger rules on forest risk commodities, geolocation data, and supply evidence, as shown by recent scrutiny of how deforestation rules sharpen sourcing duties. Nature related disclosure operates at a wider level, but the operational demand is similar: companies need better data from assets, suppliers, sites, commodities, and local ecosystems.
Disclosure pressure is also broadening beyond climate and forests. The addition of an ocean disclosure category by CDP has widened the sustainability data burden for companies already managing climate, water, forest, biodiversity, and transition plan requests. The ISSB’s approach may reduce fragmentation if it gives preparers a more coherent route for investor focused nature reporting.
Finance, governance, and sustainability teams will have to treat nature as more than a narrative risk. Nature related exposure can involve physical damage, transition risk, regulatory change, reputational pressure, commodity availability, land use conflict, permitting delays, supply disruption, and asset impairment. A company may need to understand where its operations depend on water, soil health, pollination, ecosystem services, or biodiversity sensitive land before it can explain the financial effects.
The Practice Statement route gives the ISSB flexibility. A full mandatory standard would create clearer obligations, but it would also increase implementation pressure at a time when many jurisdictions are still adopting IFRS S1 and IFRS S2. Guidance can help companies and regulators build capability before nature reporting becomes more prescriptive.
Some investors and sustainability groups want faster movement towards comparable mandatory disclosure because nature loss can create financial risk long before it is visible in conventional accounts. Others are concerned that premature mandatory metrics could produce unreliable reporting if data systems, methodologies, and assurance practices are not ready.
The ISSB has chosen a more gradual route, recognising the practical value of TNFD metrics while keeping the reporting lens anchored in investor useful information and compatibility with IFRS Sustainability Disclosure Standards. Companies already working with TNFD will have a stronger basis for using that work in ISSB aligned reporting, while those at an earlier stage will face clearer expectations that nature risk cannot remain outside financial disclosure systems indefinitely.
The next stage will be the exposure draft. Once published, companies, investors, auditors, regulators, and standard setters will scrutinise how far the Practice Statement goes, how it defines nature related physical and transition risks, how it treats metrics, and how it handles first time application. The technical details will shape whether nature reporting becomes a manageable extension of existing sustainability disclosure or another fragmented compliance layer.
Nature has entered the financial reporting architecture. The ISSB’s latest decision does not turn TNFD metrics into a universal requirement, but it gives them a recognised place in the developing global baseline. Biodiversity, ecosystems, and natural resource dependency will increasingly sit inside risk management, assurance, and board oversight.
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