ISSB Chooses Practice Statement Path for Nature Disclosure Standards

The IFRS Foundation's International Sustainability Standards Board has decided to develop nature-related disclosure requirements as a non-mandatory IFRS Practice Statement rather than a standalone mandatory standard. The ISSB stated that this approach minimises disruption while companies implement its recently issued sustainability and climate standards, and left open the possibility of a mandatory nature standard in the future.

The decision comes after ISSB staff recommended the Practice Statement route over a standalone standard, prompting an open letter from several sustainability groups urging the ISSB to choose a mandatory standard aligned with the latest science and global policy commitments. The ISSB countered that under existing IFRS S1, material nature-related disclosures are already required, and the Practice Statement will provide practical guidance on how to make those disclosures. ISSB Chair Emmanuel Faber stated that providing material nature-related disclosures 'is not optional; IFRS S1 already requires that.'

The choice of a Practice Statement rather than a mandatory standard represents a compromise between pace and ambition. Although non-mandatory by design, Practice Statements can be made compulsory by jurisdictions that choose to adopt them, giving individual regulators the flexibility to elevate requirements. This approach also aligns with the ISSB's stated priority of allowing companies, many of which are still in early stages of implementing IFRS S1 and S2, to stabilise their reporting before new obligations are layered on. The Taskforce on Nature-related Financial Disclosures ended its own technical work program following the ISSB initiative.

The ISSB aims to publish an exposure draft of the proposed nature-related IFRS Practice Statement for public comment in October 2026. The board will include a specific consultation question asking whether stakeholders agree that the Practice Statement is the right form of standard-setting for nature-related disclosures, keeping the door open to a potential shift toward a mandatory standard based on feedback. The outcome will also shape how large companies in India and other major emerging markets approach nature reporting as ISSB adoption broadens across jurisdictions.

Key figure — October 2026 exposure draft publication target