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      (This article was published on 6 February 2026 and updated on 14 May 2026)

      Highlights

      – What's the latest status?

      – What's the impact?

      – What's next?

      – Actions for management

      Companies can expect additional guidance on using scenario analysis and identifying risks and opportunities as part of the proposed IFRS® practice statement on nature-related disclosures.

      The International Sustainability Standards Board (ISSB) agreed in May 2026 that it will propose this guidance as part of its ongoing development of new requirements and guidance for nature-related disclosures.

      Barbara Zonneveld
      Barbara Zonneveld

      Sustainability Reporting Director

      KPMG International

      IFRS S1 already requires reporting on all material sustainability-related risks and opportunities, yet the growing investor focus on nature-related topics warrants more targeted guidance. Clearer guidance would help companies prepare consistent nature-specific disclosures that promote high-quality reporting and informed decision-making.

      Barbara Zonneveld

      Sustainability Reporting Director

      What's the latest status?

      The ISSB has decided to provide companies with more guidance on identifying and assessing nature-related risks and opportunities that would include:  

      • applying the scenario analysis requirements of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures; and

      • using the Locate, Evaluate, Assess and Prepare (LEAP) approach1 from the Taskforce on Nature-related Financial Disclosures (TNFD).   

      The guidance would be part of a proposed IFRS practice statement on nature-related disclosures, expected in October 2026, which would supplement existing IFRS Sustainability Disclosure Standards and SASB Standards, and build on the TNFD recommendations2. 

      The table below summarises the ISSB’s decisions to date.

      Focus areaDecision dateISSB decisions

      Identifying risks and opportunities

      May 2026
      • New guidance is proposed on using the LEAP approach to understand a company’s interfaces with nature, evaluate related dependencies and impacts, and assess associated risks and opportunities.
      • Companies using the LEAP approach may need to adapt it to ensure consistency with IFRS S1 objectives.

      Scenario analysis

      May 2026
      • The proposals would add incremental requirements for a company to disclose whether and how it uses scenario analysis in assessing the nature, likelihood and magnitude of nature-related risks, and identifying nature-related opportunities. 
      • Scenario analysis would be required for assessing the resilience of nature-related strategies and business models. This will mirror the approach for climate-related assessment under IFRS S2 and will use similar proportionality mechanisms. 

      Location-specific information

      April 2026
      • The proposals would require companies to disclose the amount and percentage of assets or business activities vulnerable to nature-related risks or aligned with opportunities. This guidance would be subject to relief.
      • Companies would receive guidance on how to consider location when identifying risks, opportunities and material information. This may also be relevant for reporting topics other than nature, such as climate.

      Indigenous peoples, local communities and affected stakeholders

      April 2026
      • The proposals would introduce application guidance on risks and opportunities arising from the relationship between nature and indigenous peoples, local communities and affected stakeholders. This guidance would illustrate a key connection between environmental and social topics.

      Transition plans

      March 2026
      • Companies would need to report on how they are transitioning their business to manage nature-related risks and opportunities. However, companies would not need to disclose a formal transition plan.

      Metrics

      March 2026
      • The proposals would not introduce cross-industry, nature-related metrics at this point. Instead, the ISSB proposes to update and enhance nature-related requirements in SASB industry-based standards.
      • However, it may add the TNFD as a source of guidance for companies to identify relevant cross-industry metrics.

      Targets and regulatory alignment

      March 2026
      • The proposals would not include requirements for specific nature-related targets. Instead, the ISSB proposes to add guidance and examples to IFRS S1 to explain what nature-related targets might look like.
      • Companies can also expect guidance to disclose whether and how local laws and regulations have informed any such targets.
      Project scopeFebruary 2026
      • The proposals would focus on nature-related risks and opportunities. As a result, the project was renamed from ‘BEES’ to ‘Nature-related Disclosures’.
      Defined termsFebruary 2026
      • The project’s scope would encompass nature-related risks and opportunities, aligning with the scope of IFRS S2 for climate-related risks and opportunities, and would also draw on the TNFD recommendations.  
      • Other important terms would also be defined, such as ecosystem services and environmental assets, used under the TNFD to explain the benefits and resources nature provides. 
      • The ISSB also intends to issue guidance on key concepts and terms such as nature, dependencies on nature and impacts on nature.
      Climate-nature nexusFebruary 2026
      • Companies can expect targeted guidance on how to apply the existing connected information requirements in IFRS S1 and IFRS S2.
      • This proposed guidance would help companies explain the effects of climate-nature connections on a company’s risk profile; trade-offs between actions that address climate- and nature-related risks and opportunities; and synergies from addressing them together. 

      What’s the impact?

      Although companies already need to report material nature-related information under IFRS S1 (after their first year of reporting3), this project aims to help them do so more effectively. 

      The proposed practice statement is intended to provide more comprehensive support in applying IFRS S1, IFRS S2 and related SASB Standards to a broad range of nature-related topics, such as land use, pollution, resource extraction, water and biodiversity.

      By issuing the materials as an IFRS practice statement, the ISSB aims to provide flexibility for preparers, while also minimising disruption as jurisdictions adopt IFRS S1 and IFRS S2. Jurisdictions could choose to mandate the guidance, which would have a similar effect to introducing a new standard.

      What’s next?

      The practice statement will take time to develop and, once finalised, will need to be adopted locally to become mandatory. An exposure draft is expected in October 2026, to be followed by a period of public consultation and revision.

      Actions for management

      • Bookmark and revisit this page to stay informed about the project, including the exposure draft expected in October 2026.
      • Understand how your company is exposed to nature-related risks and opportunities, including by familiarising yourself with the TNFD’s LEAP approach. If you are exposed, then consider how TNFD materials can help you to report, given that the ISSB is building its practice statement on them.
      • Companies reporting under ESRS and GRI Standards need to monitor the ISSB's proposals closely. Although the ISSB aims to align with these standards, differences may emerge in the final proposals. 

      1 The LEAP approach is a four-phase assessment framework designed to help companies identify, manage and report on nature-related dependencies, impacts, risks and opportunities.

      2 The proposals also seek to align with European Sustainability Reporting Standards (ESRS) and the Global Reporting Initiative (GRI) Standards.

      3 The ‘climate-first’ exemption in IFRS S1 allows companies to report only on climate-related risks and opportunities for the first year of reporting.

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