The International Sustainability Standards Board( ISSB) under the IFRS Foundation has blazoned plans to begin developing exposure norms concentrated on nature- related pitfalls and openings. The action, aimed at addressing growing investor demand for nature- related translucency, marks the coming major phase in the ISSB’s sustainability reporting work beyond climate- related issues. An original draft of the new exposure conditions is anticipated by late coming time.
Established in November 2021, the ISSB’s purpose is to produce encyclopedically harmonious sustainability reporting norms that give investors with dependable information about companies’ environmental and social pitfalls and openings. The board’s first two norms — IFRS S1, covering general sustainability exposures, and IFRS S2, concentrated on climate- related reporting — were launched in June 2023. These norms are now being espoused or considered by several countries and pots worldwide, forming a foundation for similar sustainability exposures.
Following the release of IFRS S1 and S2, the ISSB’s 2024 – 2026 work plan expanded its focus to broader environmental motifs, including biodiversity, ecosystems, and ecosystem services( inclusively known as notions). Through its exploration, the board linked significant investor interest in harmonious and decision-useful information about how companies depend on and impact natural ecosystems. The ISSB concluded that there’s a growing recognition among capital providers that nature loss poses material fiscal pitfalls and openings across sectors, from husbandry and forestry to manufacturing and finance.
To guide its work, the ISSB will draw considerably from the Taskforce on Nature- related fiscal exposures( TNFD) frame. The TNFD, which released its final recommendations in September 2023, provides a structured approach for companies to assess and expose their relations with nature. Its frame revolves around 14 recommended exposures and introduces the “ vault ” approach — detect, estimate, Assess, and Prepare which helps associations totally identify and manage nature- related dependences , impacts, pitfalls, and openings.
The TNFD has gained rapid-fire traction since its launch, with further than 730 companies and fiscal institutions — representing over$ 9 trillion in request capitalization and$ 22 trillion in means under operation — committing to borrow its recommendations. The IFRS Foundation and TNFD homogenized a collaboration before this time to align sweats on nature- related fiscal exposures. This cooperation enables both bodies to partake exploration, specialized moxie, and guidance to insure consonance between TNFD’s voluntary frame and the ISSB’s encyclopedically honored norms. The collaboration also extends to the improvement of assiduity-specific reporting guidance developed under the Sustainability Account Standards Board( SASB), which the ISSB oversees.
Following the ISSB’s advertisement, the TNFD stated that it would break new specialized guidance work beyond what’s formerly in progress, fastening rather on supporting the ISSB’s new standard- setting process. This move reflects the TNFD’s thing of icing that its being frame can serve as a solid foundation for a unified global approach to nature- related exposure.
The ISSB has yet to determine the specific format its new nature- related norms will take. Options under consideration include creating a separate standalone standard, incorporating nature- related exposure conditions into being ISSB norms similar as IFRS S1, issuing operation or assiduity-specific guidance, or combining multiple approaches. The board will finalize its approach in the coming months after consultations and reflections.
The ISSB aims to release an exposure draft of the proposed exposure conditions by October 2026, coinciding with the Convention on Biological Diversity’s COP17 meeting. The timeline underscores the board’s intent to align its progress with global biodiversity and sustainability mileposts.
Emmanuel Faber, Chair of the ISSB, emphasized that addressing nature- related pitfalls is essential for a comprehensive sustainability exposure frame. He noted that the board’s decision to make upon the TNFD’s established work will help reduce fragmentation in global reporting norms and accelerate thickness in how nature- related data is collected and reported.
“ The ISSB recognises that there’s a clear investor need for information about nature- related pitfalls and openings, ” Faber said. “ Drawing on the TNFD frame enables us to meet this need efficiently, reducing fragmentation and structure on leading practice. ”
The move reflects a growing agreement among global controllers, investors, and sustainability experts that biodiversity loss and ecosystem declination present fiscal pitfalls similar to those posed by climate change. By integrating nature into its sustainability exposure docket, the ISSB aims to give requests with a further holistic understanding of environmental dependences and impacts, further aligning fiscal reporting with global sustainability pretensions.
