The Board's latest decisions provide greater clarity on how organizations should approach nature-related disclosures under IFRS S1. While the proposed IFRS Practice Statement is intended to support implementation, the decisions also clarify several important aspects of nature reporting that organizations should begin preparing for.
The ISSB reaffirmed that organizations are expected to disclose nature-related risks and opportunities only when they could reasonably be expected to affect enterprise value. This reinforces the investor-focused objective of IFRS S1, ensuring that organizations prioritize information that is relevant to capital providers rather than reporting every environmental issue.
One of the most significant outcomes of the meeting is the ISSB's recognition that organizations may use TNFD-aligned metrics to support nature-related disclosures, provided they are consistent with the objectives of IFRS S1 and do not conflict with the ISSB Standards. This provides greater confidence for organizations that have already begun implementing TNFD while promoting greater consistency across sustainability reporting frameworks.
To create greater consistency across the IFRS Sustainability Disclosure Standards, the ISSB has introduced concepts such as nature-related physical risks and nature-related transition risks, mirroring the reporting architecture already established under IFRS S2. This enables organizations to build on existing climate governance and risk management processes instead of developing separate reporting systems for nature.
The Board has replaced the term "environmental assets" with "environmental resources," reflecting a broader understanding of how organizations depend on biodiversity, water, ecosystems, forests, land, and other forms of natural capital. The revised terminology encourages organizations to consider these dependencies when assessing financially material risks and opportunities.
To simplify implementation, the ISSB has proposed that organizations applying the Practice Statement for the first time will not be required to provide comparative information during the initial reporting year. Disclosures will also apply prospectively from the date of adoption, allowing organizations additional time to strengthen governance, reporting processes, and data capabilities.
The ISSB has clarified that organizations may only claim compliance when they fully apply both the Practice Statement and the IFRS Sustainability Disclosure Standards. This reinforces the importance of robust governance, reliable data, and consistent reporting processes.
The ISSB's latest decisions provide organizations with greater clarity on the future direction of nature-related reporting. While the Practice Statement is still under development, the Board has established a clear implementation pathway that organizations can begin preparing for today. Businesses that have already started aligning with the TNFD framework are well positioned to build on their existing work. Governance structures, <a href="https://www.cognitud.com/solutions/impact-assessment/approaches/environment-impact-assessment" style="text-decoration: underline; color:#1a0dab;">nature-related assessments</a>, and reporting processes developed through TNFD can support future IFRS S1 disclosures, reducing duplication and strengthening reporting readiness. As nature-related disclosures become more closely integrated with financial reporting, organizations should begin preparing by:
Assessing whether nature-related risks and opportunities could materially affect enterprise value.
Integrating nature-related considerations into existing governance and enterprise risk management frameworks.
Strengthening internal data collection and reporting processes to support reliable, decision-useful disclosures.
Reviewing existing TNFD assessments to identify opportunities for alignment with IFRS S1.
Building cross-functional collaboration between sustainability, finance, risk, and governance teams to support future reporting requirements.
As reporting expectations continue to evolve, organizations need more than an understanding of emerging frameworks; they need a practical implementation strategy. Cognitud helps organizations prepare for nature-related reporting by assessing current disclosure practices, identifying gaps in governance and data, and developing implementation roadmaps aligned with IFRS S1, IFRS S2, and the TNFD framework. From TNFD readiness assessments and LEAP-based evaluations to disclosure development and reporting alignment, we support businesses in building robust, investor-focused sustainability reporting that is ready for the future.
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Dr. Somnath Hazra
Build actionable plans grounded in your sector’s risks and growth priorities.
IFRS S1 is a sustainability disclosure standard developed by the International Sustainability Standards Board (ISSB). It requires organizations to disclose sustainability-related risks and opportunities that could affect enterprise value, helping investors access consistent, comparable, and decision-useful sustainability information.
IFRS was introduced to create globally consistent financial reporting standards that improve transparency, comparability, and accountability. The IFRS Sustainability Disclosure Standards extend this approach to sustainability-related financial information, enabling investors to make better-informed decisions.
TNFD aligns with IFRS S1 by providing practical guidance for identifying and disclosing nature-related risks and opportunities. The ISSB recognizes TNFD as a key reference framework, allowing organizations to leverage existing TNFD assessments while meeting IFRS S1 disclosure objectives.
The Taskforce on Nature-related Financial Disclosures (TNFD) is a global framework that helps organizations identify, assess, manage, and disclose nature-related risks and opportunities. It supports transparent reporting on biodiversity, water, land, and ecosystem-related issues.
Emerging markets often face challenges such as limited sustainability data, resource constraints, evolving regulations, and a shortage of reporting expertise. These factors can make ISSB implementation more complex, although adoption can improve transparency and investor confidence.
