Standard on Nature-related Risks and Opportunities

By taking up this topic at standard-setting level at its meeting of 28 January 2026, the ISSB clearly moved the "Standard on Nature-related Risks and Opportunities" away from a voluntary, TNFD-like framework and towards a standard that builds on IFRS S1/S2 and will form part of the IFRS sustainability standards family.

1) What did the ISSB clarify? (The 2 most important decisions)

The ISSB decided to take the nature standard forward on the following basis:

1. The scope will not be narrowed: It will not be limited to a single topic such as "biodiversity" or to specific sectors; it will cover all nature-related risks and opportunities (in line with IFRS S1, those that could "affect the entity's prospects" and are material).
2. It will be an "add-on" to IFRS S1 and IFRS S2: The new nature standard will be designed on the assumption that companies apply IFRS S1 (general requirements) and IFRS S2 (climate); in other words, it will integrate "nature" into the four core content areas of S1 (governance, strategy, risk management, metrics and targets).

Conclusion: This is no longer at the level of "let's recommend the TNFD"; it is an investor-focused IFRS sustainability standard track that is effectively a continuation of IFRS S1/S2.

2) Content of the staff paper: what will it cover and how will it proceed?

A) Defining the scope of the nature standard (impacts and dependencies → risks and opportunities)

The staff paper clearly emphasises that the scope is not merely "impacts", but the risks and opportunities arising from the company's dependencies and impacts on nature, and that these will be addressed across the value chain.

B) TNFD as a "basis", but with IFRS S1 logic

The ISSB staff plan to draw on the TNFD's terminology, LEAP approach and metrics guidance, but aim to do so in "policy-neutral" language consistent with IFRS S1's focus on materiality and "prospects".

C) The first concrete step: defined terms

The staff paper states that, as a first step, at least the following kinds of "core definitions" will be developed:

• nature-related risks / opportunities
• nature-related physical risks / transition risks

There is an intention to draw on the TNFD glossary wherever possible.

D) Topics in the project plan (Table 1 – very instructive)

The staff paper lists the "information areas" to be worked on on the way to an exposure draft; some are particularly noteworthy:

Location-specific information → because nature-related risks are "location-dependent", the ISSB will address its approach to this separately.

Nature-related transition plans → how should a company's nature transition or action plan be disclosed?

Strategy and processes for engagement with IPLCs (Indigenous Peoples and local communities)

Climate-nature nexus → the link between climate and nature (e.g. the connections between climate risks and water, forest and ecosystem risks)

As for metrics, note that the possibility of "limiting them in the exposure draft for now or deferring them to a later phase" is explicitly on the table.

3) How does this change the earlier (TNFD-centred) view?

Until now, "nature reporting" in practice meant the TNFD framework. Now:

TNFD = likely content source / methodology (LEAP, definitions, pool of metrics)

ISSB standard = an investor-focused, materiality-based disclosure architecture aligned with IFRS S1/S2 (which jurisdictions may make mandatory through their own regulations)

In other words, for companies "TNFD alignment" is no longer a goal in itself but a tool for preparing for the forthcoming IFRS nature standard.

4) Practical takeaway: what should companies prepare for now?

Based on the roadmap drawn by the staff paper (particularly given its emphasis on location-specific information and the value chain), the 6 most useful preparatory steps are:

Nature inventory – location mapping: mapping facilities, land, projects and critical suppliers by location (overlap with water stress, protected areas, habitats, etc.).

Bridging dependencies and impacts to risks and opportunities: not "we use water", but linking this to its effect on cash flows, access to finance and costs (the IFRS S1 "prospects" logic).

Draft nature transition plan: targets, investment plan, timeline, governance and monitoring.

Climate-nature link: if you already have climate risk work (S2), the infrastructure to connect the nature side through the "nexus".

Metrics strategy: the ISSB may limit metrics in the first draft, but setting up an internal set of metrics now (drawing on the TNFD, GRI, ESRS, etc.) will give you an advantage.

Value chain scope and the "undue cost or effort" logic: IFRS S1's value chain approach and relief provisions will also underpin the nature standard.

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Example note / disclosure template (in TSRS–IFRS S1 language)

The template below has been prepared so that it can be adapted directly for a report. Fields in square brackets "[…]" should be completed according to the entity's circumstances.

3.1 Objective and scope

Nature-related risks and opportunities (BEES – biodiversity, ecosystems and ecosystem services) The Company identifies risks and opportunities related to biodiversity, ecosystems and ecosystem services within its operations and value chain, and monitors their effects on the Company's cash flows, access to finance and cost of capital. These disclosures have been prepared in line with the core content of IFRS S1/TSRS 1.

Reporting boundary and value chain The disclosures cover the Company's [consolidated] operations and the critical stages of the value chain where significant nature-related dependencies and impacts arise. The value chain scope includes, in particular, [critical raw material/energy/water] suppliers and the stages where nature-related impacts from [product use/disposal] are significant.

3.2 Governance

Oversight and responsibilities The Board of Directors' [Sustainability Committee / Risk Committee] is responsible for overseeing nature-related risks and opportunities. At least [X] times a year, the Committee reviews: (i) the status of material risks, (ii) permit and compliance performance, (iii) progress towards targets and (iv) reports of significant incidents or breaches.

Role of management Senior management is responsible for integrating BEES risks and opportunities into operational plans, for data collection processes and for monitoring performance metrics. The [CFO/COO/ESG Director] reports regularly to the Board of Directors.

3.3 Strategy

Dependencies and impacts on nature (summary) The Company's main dependencies on nature: [water supply], [soil/regulating ecosystem services], [raw material supply]… The Company's main impacts on nature: [water withdrawal], [wastewater/discharges], [land use], [waste and pollution]…

Material risks and opportunities The Company has assessed the following risks and opportunities as material:

Physical risks: [production disruption, cost increases, lower yields] due to [water stress / ecosystem degradation / floods and erosion / ecosystem effects of wildfires].

Transition risks: [higher CAPEX/OPEX, longer permitting times, project delays] due to [water permits, environmental legislation, protected-area restrictions, financing conditions, supplier standards].

Opportunities: [cost reductions, risk mitigation, new revenue or financing advantages] through [water efficiency investments, circular practices, nature-based solutions, green finance].

Financial effects and resilience The possible effects of these risks and opportunities on the Company's financial outlook are assessed through the following channels:

in the short term: [OPEX/operating costs, disruption risk],

in the medium to long term: [CAPEX, risk of asset impairment, cost of capital]. Through [scenario/sensitivity] analyses, the Company assesses its resilience, particularly under conditions of [high water stress].

3.4 Risk and impact management

Identification and assessment The Company identifies nature-related risks through (i) location-based screening, (ii) permit and compliance analysis, (iii) supplier assessment and (iv) operational performance data. Risks are prioritised using a likelihood-impact matrix and financial materiality criteria.

Integration BEES risks have been incorporated into the Enterprise Risk Management process. Action plans and control activities have been defined for critical risks, and performance indicators have been assigned to the relevant process owners.

3.5 Metrics and targets

Metrics The Company monitors its nature-related performance using the following metrics:

Water withdrawal: [m³] (by source: [municipal/groundwater/surface water])

Water recovery rate: [%]

Wastewater discharge: [m³] and [COD/BOD/N-P] indicators

Total waste / hazardous waste: [tonnes]

Land use change / rehabilitation: [ha]

Environmental permit breaches/penalties: [number]

Targets and progress The Company has set the following targets for the period [2026–2030]:

Reduce water withdrawal by […]% / improve water intensity per unit of production by […]%

Increase the water recovery rate to […]%

Reduce hazardous waste intensity by […]%

Increase the [rehabilitated/restored] area to […] ha

Progress towards targets is monitored on a [annual/quarterly] basis and reported to the Board of Directors.

Limitations and uncertainties Some value chain data is based on supplier declarations. Areas where [proxies/estimates] are used, together with the methodology and uncertainties, are disclosed separately.

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