Signal Scanner · CLIMATE, NATURE & FOOD SYSTEMS · 29 September 2026

The ISSB Calls Its Nature Rules Voluntary While IFRS S1 Already Requires the Disclosure

The ISSB calls its nature Practice Statement non-mandatory, yet IFRS S1 already requires material nature disclosure, so the exposure draft due in October 2026 sets the method. Exposed: listed companies, lenders and auditors in ISSB jurisdictions.

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The consensus reading of 2026 is that nature disclosure lost momentum. The International Sustainability Standards Board (ISSB), which writes the global baseline for corporate sustainability reporting, chose a non-mandatory Practice Statement over a standalone standard, and the European Commission cut its reporting datapoints by more than 70% (European Commission, 03/07/2026). Beneath both headlines the ISSB's own papers are firmer. IFRS S1, its core standard on disclosing the sustainability risks and opportunities that could affect a company's prospects, already requires material nature-related information, and a company applying the Practice Statement gets “the full effect of an ISSB Standard” (IFRS Foundation, 22/04/2026). The label is voluntary; the duty is not. An exposure draft due in October 2026 will publish a method for meeting it.

Signal Identification

A regulatory pivot in the form of a standard. The label is voluntary but the obligation sits in IFRS S1 and enters through materiality, so exposure runs through auditors, lenders and litigants.

Time horizon: 1-3 years (exposure draft October 2026; comment window closes early 2027; final Practice Statement and jurisdictional decisions 2027-2028)
binds 1-3 yrs2026202720282029
Plausibility band: Medium–High
LowMediumHigh
Geographic / Jurisdictional Scope: Primary: jurisdictions using ISSB Standards, including Australia, Brazil, Canada, Japan, Singapore and the UK. Spillover: EU-27 reporters under the revised ESRS, US-listed groups with operations in ISSB jurisdictions, and parties to CBD COP17.
PrimaryISSB jurisdictions
SpilloverEU-27US-listed groupsCBD COP17 parties
Sectors exposed:
Listed companies reporting under ISSB-based rulesLand and water intensive industryAgriculture, food and beverageMining and utilitiesBanks and asset managersExternal audit and assurance

What's Changing

The ISSB set the form on 22 April: “Providing material nature-related disclosures is not optional; IFRS S1 already requires that” (IFRS Foundation, 22/04/2026). A July staff paper confirms both halves: “Under IFRS S1, entities are already required to provide material information about nature-related risks and opportunities”, yet “a jurisdiction adopting or otherwise using ISSB Standards would not be required to adopt the Practice Statement” (IFRS Foundation, 21/07/2026). On 21 July the ISSB confirmed due process and set a 120-day comment period (IFRS Foundation, 21/07/2026).

The EU moved the other way. On 3 July the Commission adopted revised ESRS that “reduce the number of mandatory datapoints by over 60% and the total number of datapoints by over 70%” (European Commission, 03/07/2026), expected to enter into force on 10 November 2026 and apply mandatorily from financial year 2027 (EY, 23/07/2026). The ISSB route runs through national adoption: its jurisdiction list, updated on 24 September, carries profiles for Australia, Brazil, Canada, Japan, Singapore and the UK, among others (IFRS Foundation, 24/09/2026).

Voluntary practice is growing regardless. The TNFD's status report counts “over 1,000 organisations across 56 countries or areas” publishing TNFD-aligned reports, “a 100% increase in the number identified in 2025”, while average disclosure per organisation “declined slightly”. More than 70% of survey respondents “want the certainty and consistency of mandatory reporting standards” (TNFD, 21/09/2026). Negotiators in Nairobi were still arguing over disclosure requirements in August (Inter Press Service, 18/08/2026).

Two moves in opposite directions, and the dates that decide the third

THE 2026 CALENDAR, APRIL TO NOVEMBER 22 Apr ISSB picks Practice Statement 3 Jul EU adopts revised ESRS 21 Jul 120-day window set Oct Exposure draft due 10 Nov Revised ESRS due in force SIZE OF EACH MOVE, % CHANGE FROM A COMMON BASELINE EU mandatory datapoints, cut by over 60% over 60% EU total datapoints, cut by over 70% over 70% TNFD-aligned reporters, up 100% over 1,000 organisations Left of the line: the EU trims what is mandatory. Right: voluntary reporting doubles. Third move, in between: IFRS S1 already requires material nature disclosure.

Source basis: IFRS Foundation (22/04/2026, 21/07/2026); European Commission (03/07/2026); EY (23/07/2026); TNFD (21/09/2026). Bars are drawn to the stated figures.

Disruption Pathway

Stage one runs to early 2027: the exposure draft appears in October and the 120-day window closes around February on the analyst's arithmetic. Stage two, 2027 to 2028, is jurisdictional: each ISSB-using jurisdiction decides whether to reference the final statement, and none is required to. Stage three matters most and shows least. On the available evidence, auditors, lenders and litigants will use the statement as the yardstick for what S1 materiality means for nature, mandate or not, because it will be the published method carrying the ISSB's name.

Stress concentrates in three places. Asset-level data: land, water and input-dependent companies reporting no nature information today face an S1 duty without a baseline. Divergence: a group reporting under ESRS and holding subsidiaries in ISSB jurisdictions will run two standards of care. Quality: average TNFD-aligned disclosure per organisation slipped as reporter numbers doubled (TNFD, 21/09/2026), so breadth is outrunning depth. Two adaptations follow. Operationally, a nature screen enters the S1 materiality process at asset level. Financially, lenders align data requests to the Practice Statement instead of bespoke questionnaires.

Why This Matters Now

This lands on CFOs, audit committee chairs, heads of sustainability reporting and the lenders and investors who read their reports. The assumption to revise is that a voluntary standard means a voluntary duty. S1 materiality is a management judgement, and having followed no nature standard is a weaker position once one carries the ISSB's name and “more than 800 entities” have already disclosed in line with the TNFD (IFRS Foundation, 21/07/2026). Reporting teams in ISSB jurisdictions should run an asset-level nature materiality screen this cycle and record the conclusion, and draft a response to the exposure draft inside the 120-day window.

Decision-action posture for this signal: Prepare — the duty exists today and the method arrives in October, but no jurisdiction has yet required the statement itself, so resources should be committed on the trigger of the published exposure draft.

Counter-Argument

The strongest objection is that S1 has always required this and little has followed. A duty resting on self-assessed materiality is weak, adoption of the statement is left to each jurisdiction (IFRS Foundation, 21/07/2026), and the EU's cut of over 60% of mandatory datapoints shows the political direction (European Commission, 03/07/2026). The TNFD's survey reads as an admission that voluntary disclosure has not delivered consistency, with more than 70% of respondents wanting mandatory standards (TNFD, 21/09/2026). On this view the Practice Statement is a manual nobody is obliged to open.

The objection is strongest on timing and weakest on direction. Guidance with “the full effect of an ISSB Standard” for those who apply it is a reference point that needs no mandate (IFRS Foundation, 22/04/2026). On the available evidence, the 1,000-plus organisations already reporting become the comparator against which a silent peer is judged, and the ISSB says the form “provides the ISSB with a pathway to a standard-based outcome in the future”.

Implications

Taken together, the sources suggest durable change rather than transient evolution, because the duty already sits in S1 and the method is being written for it. The inflection window runs from the October 2026 exposure draft to final issue and jurisdictional decisions in 2027 to 2028, and the ISSB's April announcement, the canonical statement of the design, keeps a standard open as the destination (IFRS Foundation, 22/04/2026). Preparers already reporting on the TNFD basis gain. Companies in land, water and input-dependent sectors with no asset-level data, and their lenders, carry the catch-up cost.

Early Indicators to Monitor

Disconfirming Signals

Strategic Questions

Keywords

Nature-related disclosures; ISSB Practice Statement; IFRS S1 materiality; TNFD; ESRS simplification; CSRD; biodiversity reporting; CBD COP17; asset-level nature data; sustainability assurance

Bibliography

Source tiers: Tier 1, governments, regulators and intergovernmental bodies. Tier 2, think-tanks, academic institutes, major consultancies and quality data providers. Tier 3, quality journalism and specialist trade press. Tier 4, vendor, company and practitioner sources, used only as directional corroboration.

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Prepared by Shaping Tomorrow: 29 September 2026