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      Highlights

      – What is the ISSB proposing?

      – What would the proposals mean for companies?

      – Practice statement or standard – what is the difference?

      – What’s next?

      – Actions for management

      Companies applying IFRS® Sustainability Disclosure Standards can expect greater clarity on how to identify, assess and disclose nature-related risks and opportunities (NROs) under the International Sustainability Standards Board’s (ISSB) proposed practice statement.

      The proposals would introduce guidance on areas including location-specific analysis, connections between nature and climate and the use of information gathered through engagement with affected stakeholders.

      The proposed practice statement could influence how companies identify, assess and disclose nature-related information in practice. Comments on the proposals are open until 19 February 2027.

      Barbara Zonneveld

      Sustainability Reporting Director

      KPMG International

      These proposals would not create a separate nature-reporting framework, but they could change the depth of analysis and evidence needed in practice. Companies can use the consultation period to assess how their existing processes, data and controls may need to evolve.

      Barbara Zonneveld

      Sustainability Reporting Director

      What is the ISSB proposing?

      The proposals build on IFRS S1 General Requirements for Sustainability-related Financial Information to assist companies in disclosing information about NROs. They also complement IFRS S2 Climate-related Disclosures. 

      The table below summarises the key proposals.

      Area 

      Proposal 

      Location-specific aspects 

      Consider the appropriate geographical scale for identifying and disclosing nature-related information about specific sites, regions or parts of the value chain. 

      For example, information may need to be disaggregated by site rather than a jurisdiction to adequately explain NROs.

      Connecting nature and climate

      Identify connections between nature- and climate- related risks and opportunities, including synergies and trade-offs when assessing NROs and developing strategies and actions.

      Interactions with affected stakeholders

      Consider interactions and engagement with indigenous peoples, local communities and other affected stakeholders when identifying, assessing and managing NROs.

      Scenario analysis and resilience 

      Use scenario analysis to assess the resilience of the strategy and business model, proportionate to a company’s circumstances.

      Metrics and targets

      Collect sufficient data and undertake appropriate analysis to quantify the exposure to NROs. 

      This includes the amount and percentage of assets or business activities vulnerable to nature-related risks or aligned with nature-related opportunities.

      What would the proposals mean for companies?

      The proposals build on the recommendations of the TNFD1 and have been developed to inform and be applied alongside ESRS2 and GRI3. A company already reporting on nature under these other frameworks could leverage existing reporting and use the proposals to identify any gaps in their nature-related reporting. 

      However, a company may need to enhance their existing processes and data to apply the proposed requirements. The extent of the changes would depend on the maturity of its current nature-related practices.

      A company new to reporting on nature would be able to use the proposals to better understand how to identify NROs. The proposals would also allow it to understand what information would be needed and identify any gaps in its current processes. 

      Practice statement or standard – what is the difference?

      If a company intends to state compliance with the practice statement it would need to apply all its requirements. However, it would not need to apply the proposed requirements in the practice statement to comply with IFRS Sustainability Disclosure Standards. Regulators and jurisdictions could also refer to or mandate the application of the practice statement in local requirements.

      What’s next?

      The consultation is open until 19 February 2027. The ISSB will consider the feedback received before deciding in what form to finalise the proposals. 

      Our forthcoming New on the Horizon publication will provide analysis and practical examples to support companies applying IFRS S1 and IFRS S2.

      Actions for management

      • Take this opportunity to have your say by 19 February 2027.
      • Speak to your usual KPMG contact for further information on the proposals and visit IFRS Sustainability for the latest news and discussion. 

      1 Taskforce on Nature-related Financial Disclosures

      2 European Sustainability Reporting Standards

      3 Global Reporting Initiative Sustainability Reporting Standards

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