ISSB Nature-Related Disclosures: What Companies Should Prepare Before the October 2026 Draft

The most consequential decision about ISSB nature reporting has already been taken, and it was not about biodiversity metrics or ecosystem dependencies. It was about the form of the document.

At its April 2026 board meeting in Beijing, the ISSB agreed that nature-related disclosure requirements will take the shape of an IFRS Practice Statement, a structured guidance document sitting alongside IFRS S1 and IFRS S2 without amending either. The board considered four options: amending IFRS S1, amending IFRS S2, creating a new standalone standard, or issuing a Practice Statement. It chose the lightest of the four.

That matters enormously for how companies should prepare, and it is the part most coverage skips over in favour of the October date.

The exposure draft is targeted for publication around the Convention on Biological Diversity COP17 in October 2026, and the procedural signals are strong. At its meeting on 21 July 2026, the ISSB took the permission to ballot decision, which is the final stage before an exposure draft is published. All twelve members confirmed they were satisfied the board had complied with due process and undertaken sufficient consultation and analysis to begin balloting, and no member indicated an intention to dissent from publishing.

The board also decided, unanimously, to set a 120-day comment period. That is longer than the 90 days often used, and it means a draft published in October would remain open into early 2027, with final publication some way beyond that.

Here is how nature is entering ISSB reporting, what TNFD contributes, and what to do in the weeks before the draft lands.

How This Came About

The ISSB added a research project on biodiversity, ecosystems and ecosystem services to its work plan in April 2024, following its 2023 Consultation on Agenda Priorities, in which investors indicated they were increasingly factoring nature considerations into their decisions.

In late 2025 the board decided to move from research into standard-setting, drawing on the disclosure recommendations, metrics and guidance of the Taskforce on Nature-related Financial Disclosures, including relevant aspects of its LEAP approach. The project has since been renamed from its research-era title to Nature-related Disclosures.

Two related developments followed. The TNFD announced it would wind up its technical work by the third quarter of 2026 and pivot to supporting the ISSB, which effectively consolidates nature reporting standard-setting into one place. And at its February 2026 meeting, the ISSB confirmed the essential terms and concepts that will anchor the work, and agreed to develop guidance on connecting nature-related and climate-related information under IFRS S1.

By way of scale, the TNFD reported adoption by more than 730 organisations representing around 22 trillion US dollars in assets under management at the point the ISSB took its decision.

Why The Practice Statement Decision Changes Your Preparation

The form is worth understanding precisely, because the ISSB's own language is more nuanced than either "guidance" or "standard" captures.

The board describes the project as developing disclosure requirements that will supplement IFRS S1 and IFRS S2, to be applied to nature-related risks and opportunities, delivered through a proposed IFRS Practice Statement. So the content is framed as requirements, while the vehicle is a Practice Statement. Historically, IFRS Practice Statements have been non-mandatory documents, the Management Commentary and Materiality Judgements statements being the existing examples, and they sit alongside standards rather than forming part of them. Precisely how the ISSB characterises the status of this one is something the exposure draft itself will clarify, and it is among the first things worth reading in October.

What is clear is that the Practice Statement does not amend IFRS S1 or S2, and does not automatically enter national law when a jurisdiction adopts the ISSB standards.

Three practical consequences follow.

A new standalone obligation is unlikely to arrive through this route. Companies subject to IFRS S1 already have to identify and disclose material sustainability-related risks and opportunities, and for many that already includes nature. The Practice Statement is designed to help them do that consistently rather than to create an entirely separate regime.

Jurisdictional adoption becomes a separate question. When a country adopts IFRS S1 and S2, the Practice Statement does not travel automatically with them. Each jurisdiction will decide whether and how to reference it. Expect divergence.

The compliance urgency is lower, but the investor urgency is not. Large asset owners have been explicit that they expect nature integrated into strategy and risk management, and that expectation does not wait for a mandatory standard. Norges Bank Investment Management, which holds a meaningful share of global listed equity, has been among the clearest on this.

So the honest framing is that this is primarily a comparability and quality exercise rather than a new compliance regime. Companies that read the October draft as a deadline will misallocate effort. Companies that ignore it because of the vehicle will find their existing nature disclosures compared unfavourably against a common structure.

What The Scope Looks Like

The ISSB confirmed in February 2026 that the proposals will focus on nature-related risks and opportunities, a deliberately broad framing that mirrors the language of IFRS S2 on climate.

That choice is significant. A narrower scope built around biodiversity alone would have limited the work to species and habitat questions. The broader framing pulls in dependencies on ecosystem services, water availability, soil health, pollination, and the regulatory and transition risks attached to nature, which is where most of the financial materiality actually sits.

The other confirmed workstream is connected information. The ISSB is developing guidance to help companies link nature-related and climate-related disclosures under IFRS S1. This addresses a real reporting problem, since climate and nature risks interact constantly. Deforestation is both a carbon and a biodiversity issue. Water stress is driven by climate and manifests as an ecosystem dependency. Reporting them in separate silos produces disclosures that do not reflect how the risks actually behave.

Alongside this, the ISSB is running a parallel workstream enhancing the SASB Standards, which carry industry-specific metrics. Nature-related industry metrics are likely to flow through that route as well, so companies should watch both projects rather than only the headline nature one.

What TNFD Contributes

The TNFD framework is the substantive foundation, and its concepts are worth understanding now because they will shape the draft.

The LEAP approach is the assessment methodology: Locate your interface with nature, Evaluate dependencies and impacts, Assess risks and opportunities, and Prepare to respond and report. The ISSB has said it will draw on relevant aspects of it. LEAP is not a disclosure format, it is a process for working out what to disclose, which is precisely what most companies lack.

Dependencies as well as impacts. This is the conceptual shift that distinguishes nature reporting from climate reporting. Climate disclosure has been dominated by emissions, meaning the company's impact. Nature reporting gives equal weight to dependencies, meaning what the business relies on from ecosystems. A beverage company depends on water availability. An agricultural supply chain depends on pollinators and soil fertility. Those dependencies create financial risk regardless of the company's own footprint.

Location specificity. Nature risk is intensely local in a way climate risk is not. A tonne of carbon has the same effect wherever it is emitted. Water abstraction, habitat disruption or effluent discharge have entirely different consequences depending on where they occur. TNFD requires identifying priority locations, and any ISSB draft drawing on TNFD will carry that requirement forward in some form.

Why This Is Harder Than Climate

Companies that found climate reporting demanding should expect nature to be more so, for three structural reasons.

There is no single metric. Climate has tonnes of carbon dioxide equivalent, a universal unit that makes aggregation and comparison possible. Nature has no equivalent. Biodiversity, water, soil and ecosystem condition are measured differently, in different units, with different methodologies, and they cannot be summed into a single number.

The data is location-based and mostly not held internally. Assessing nature risk requires knowing where your operations and supply chain actually sit, at site level, and overlaying that against ecological data. Most companies have neither the geographic granularity nor the ecological datasets, and the supply chain half is considerably harder than the operations half.

Financial quantification is immature. Translating ecological vulnerability into cash flow impact is genuinely difficult, and the methodologies are less developed than climate scenario analysis. This is the area where the exposure draft will attract the most comment.

Early evidence from the first cycle of mandatory CSRD reporting in the EU suggests nature disclosures remain at an early stage across the market, which is consistent with these difficulties rather than a lack of effort.

What To Do Before October

Map your interface with nature at location level. This is the foundation of everything and it does not depend on the final content of the draft. Identify where your direct operations sit, and as far as possible where your material suppliers sit, with enough geographic precision to overlay ecological data. Companies that have this mapping will be able to act on the draft immediately. Companies that do not will spend the consultation period doing groundwork.

Assess dependencies, not just impacts. Work out what your business relies on from ecosystems: water, soil, pollination, fibre, marine resources, climate regulation. For most companies this analysis has never been done, and it frequently surfaces risks that had been invisible.

Run a LEAP pilot on your highest-exposure business line. You do not need to do this across the whole group. Piloting on one material segment builds internal capability and tells you what the full exercise will cost.

Use existing climate infrastructure. Governance, risk management processes, scenario analysis capability and materiality assessment all transfer. Nature should extend those structures rather than create parallel ones, and the ISSB's connected information workstream signals that regulators expect integration rather than separation.

Respond to the consultation if nature is material to you. Companies in agriculture, food and beverage, forestry, mining, utilities, pharmaceuticals and financial services with exposure to those sectors have the most at stake in how the draft handles dependencies, location specificity and financial quantification. The 120-day comment period gives genuine time to prepare a considered submission rather than a rushed one, and a Practice Statement consultation typically attracts fewer responses than a standard, which means individual submissions carry more weight.

Track the SASB enhancements in parallel, since industry-specific nature metrics may arrive through that route.

Do not wait for the Practice Statement to be finalised. Exposure draft in October 2026 means a consultation period, redeliberation and final publication some way beyond that. Meanwhile IFRS S1 already requires disclosure of material sustainability risks and opportunities, and investors are already asking.

The broader read is that the ISSB has chosen a deliberately measured path. Rather than mandating nature disclosure through a new standard, it is providing structured guidance to help companies apply requirements that already exist, while consolidating the TNFD's work into the global reporting architecture. That lowers the compliance shock and raises the importance of voluntary quality. For companies with genuine nature exposure, the question in October will not be whether they must report. It will be whether what they already publish stands up against a common framework that investors can finally compare.

Preparation Checklist

Note that the exposure draft is targeted for around COP17 in October 2026, with permission to ballot granted unanimously at the ISSB meeting on 21 July 2026 and no member dissenting.
Plan for a 120-day comment period, which would keep the draft open into early 2027.
Understand that the output will be a proposed IFRS Practice Statement supplementing IFRS S1 and S2 rather than amending them, and read the exposure draft carefully on the question of its status.
Recognise that jurisdictional adoption of IFRS S1 and S2 will not automatically bring the Practice Statement with it.
Remember that IFRS S1 already requires disclosure of material nature-related risks and opportunities where they meet the threshold.
Map your direct operations and material suppliers at location level, with enough precision to overlay ecological data.
Assess dependencies on ecosystem services alongside impacts, since dependencies drive much of the financial materiality.
Run a LEAP pilot on your highest-exposure business line rather than attempting group-wide assessment first.
Extend existing climate governance, risk management and materiality processes to nature rather than building parallel structures.
Prepare for connected reporting between climate and nature, which the ISSB is developing guidance on under IFRS S1.
Track the parallel SASB enhancements workstream, which may carry industry-specific nature metrics.
Plan to respond during the 120-day comment period if nature is material to your sector.
Expect financial quantification of nature risk to remain the least mature area and the most contested part of the draft.

Position as of August 2026. The ISSB exposure draft on nature-related disclosures had not been published at the time of writing and the October 2026 target is an intention rather than a commitment. The form, scope and content described here reflect board decisions taken during 2026 and remain subject to due process. Confirm current status against the IFRS Foundation and take professional advice for your circumstances.

Sources

IFRS Foundation, Taskforce on Nature-related Financial Disclosures, Convention on Biological Diversity, United Nations Development Programme, Norges Bank Investment Management, KPMG International, ESG Today, IPE, Cress Consulting

This article is intended for general professional information and does not constitute legal, financial, or investment advice.