TNFD and the ISSB Nature Project: What Companies Should Prepare for in 2026

The ISSB nature project is not starting from a blank page. IFRS S1 already requires an entity applying the Standard to disclose material information about all sustainability-related risks and opportunities that could reasonably be expected to affect its prospects. Nature-related risks and opportunities fall within that existing principle even though there is not yet a dedicated final nature standard.

TNFD, meanwhile, is a voluntary risk-management and disclosure framework. It provides detailed concepts, recommendations, metrics and the LEAP assessment approach. The ISSB has repeatedly stated that it will draw on TNFD. That makes TNFD a strong preparatory resource, but TNFD use does not create advance compliance with an unpublished ISSB document.

Figure 1. The 2026 status line separates final TNFD and IFRS S1 sources from tentative ISSB decisions and the expected Exposure Draft.

TNFD provides the market-developed foundation

TNFD published its final recommendations in September 2023 after extensive market testing. Its architecture follows the four pillars familiar from TCFD and ISSB, but adds dependencies, impacts, location specificity, priority locations, engagement and nature-specific metrics.

The ISSB moved from research to standard-setting

The ISSB decided to develop nature-related disclosures that supplement IFRS S1 and IFRS S2. In November 2025, it welcomed TNFD support and encouraged market participants to continue using TNFD. In April 2026, it tentatively chose an IFRS Practice Statement as the proposed form, subject to a specific consultation question on whether that form is appropriate.

The Exposure Draft moved to ballot

At the July 2026 meeting, all 12 ISSB members confirmed that due process requirements had been satisfied to begin balloting. The ISSB decided on a 120-day comment period. The next formal milestone is the Exposure Draft, which the ISSB has aimed to publish in October 2026.

The proposed Practice Statement is intended to explain how to apply IFRS S1 and IFRS S2 to material nature-related risks and opportunities without changing the requirements in those Standards. The ISSB has said that applying the Practice Statement would have the full effect of an ISSB Standard for a company applying it, while the Exposure Draft will ask stakeholders to comment on the form of standard-setting.

This is a subtle but important status point. A proposed Practice Statement is not merely optional educational material, yet it is also not a final standard today. Until consultation, redeliberation and issuance are complete, companies should avoid describing tentative content as settled.

1. A whole-of-nature scope

The project is not limited to biodiversity alone. The ISSB has described the scope as material information about nature-related risks and opportunities, drawing on TNFD's non-siloed approach to nature.

2. Location-specific information

The ISSB tentatively decided to provide guidance on why the location of assets and business activities matters and on the appropriate granularity and aggregation of location-specific information. It also tentatively decided to require disclosure of the amount and percentage of assets or business activities vulnerable to identified nature-related risks and aligned with identified opportunities, with a reasonable-and-supportable-information proportionality mechanism.

3. Dependencies and impacts as sources of risk and opportunity

IFRS S1 already explains that sustainability-related risks and opportunities can arise from an entity's dependencies and impacts. The nature project is expected to make this pathway more operational, helping companies connect ecological conditions and business interfaces to cash flows, access to finance and cost of capital.

4. Stakeholder and community interactions

The ISSB tentatively decided to develop guidance on how interactions, including engagement with Indigenous Peoples, Local Communities and affected stakeholders, can give rise to or help address nature-related risks and opportunities. This remains an investor-focused analysis: the disclosure question is whether the information is material to primary users.

5. Strategy, response and transition information

The ISSB tentatively decided to propose nature-specific requirements and guidance on the effects of nature-related risks and opportunities on strategy and decision-making, including how the entity responds or plans to respond, whether or not the actions sit in a document labelled a transition plan.

6. Metrics and targets

Tentative decisions point to application of IFRS S1's industry-based metric requirements, consideration of cross-industry metrics within identified information areas, location-specific target information and disclosure of whether and how targets were informed by law or regulation.

7. Scenario analysis

The ISSB has discussed scenario analysis for opportunity identification, risk-effect assessment and resilience. Some decisions were supported by narrow board majorities, reinforcing why companies should treat the details as tentative until the Exposure Draft is published.

8. LEAP as relevant guidance, not a compulsory process

The ISSB tentatively decided that the proposed Practice Statement would note that TNFD LEAP might be relevant when locating interfaces with nature, evaluating dependencies and impacts and assessing risks and opportunities. It also made clear that this would not require a particular process or make LEAP a condition for compliance.

Figure 2. No-regrets preparation focuses on stable data, controls and decision pathways rather than guessing final ISSB paragraph wording.

Phase 1 - establish the current reporting basis

Confirm whether the organisation applies IFRS S1, intends to publish TNFD-aligned disclosures, reports under GRI or ESRS, or responds to investor and lender requests. Record the precise claim and the jurisdictional basis.

Phase 2 - complete a minimum nature scoping exercise

Use sector and geography screening to identify likely interfaces with nature. Map material operations, products, commodities, financing and supply-chain exposures. Do not present the heatmap as a completed materiality assessment.

Phase 3 - pilot location and DIRO analysis

Choose a limited but strategically significant population. Complete location, dependency, impact, risk and opportunity analysis and retain the evidence. Test how findings connect to budgets, risk appetite, asset plans, procurement and insurance.

Phase 4 - build the disclosure crosswalk

Map existing TNFD, IFRS S1, GRI and ESRS content to a master fact model. Separate current requirements from tentative ISSB decisions. Identify information that is reusable and information that would require a new judgement or metric.

Phase 5 - prepare for the Exposure Draft consultation

Create an issue log covering form of standard-setting, scope, proportionality, locations, metrics, targets, scenarios, LEAP, industry guidance and effective date. When the draft is published, perform a controlled delta review rather than restarting the project.

The group owns warehouses, manages construction projects and operates a logistics network. It uses TNFD to map water, heat, flood regulation, land-use and ecosystem-service dependencies at priority sites. It links these interfaces to asset damage, insurance availability, planning delay, tenant demand and low-impact redevelopment opportunities.

The team does not label the work "ISSB nature compliant". Instead, it records which evidence supports current IFRS S1 judgements, which TNFD disclosures are made and which tentative ISSB topics are being monitored. When the Exposure Draft is published, the group can test exact requirements against a mature evidence base.

Limitation. This is an illustrative scenario and does not determine the required disclosure for a real entity or jurisdiction.

1. Waiting for the final ISSB outcome before collecting location data

Correction: location and asset data are long-lead items and are already useful for TNFD and risk management.

2. Treating TNFD as future ISSB compliance

Correction: describe TNFD as a current framework and source of preparation, then test the future Exposure Draft and final requirements separately.

3. Presenting tentative decisions as mandatory

Correction: label the board meeting, use "tentatively decided" and add an update trigger.

4. Building a biodiversity-only programme

Correction: address the broader nature scope, including water, land, ocean, atmosphere, ecosystem services and nature-related transition issues.

5. Assuming LEAP will be compulsory

Correction: use LEAP where it is useful, but document the evidence and outputs rather than relying on the name of the process.

6. Ignoring current IFRS S1 obligations

Correction: assess material nature-related risks and opportunities now where IFRS S1 applies; a dedicated future document does not postpone the existing principle.

SRC-01 · Recommendations of the Taskforce on Nature-related Financial Disclosures - TNFD (Version 1.0, September 2023). https://tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature-related_Financial_Disclosures_September_2023.pdf

SRC-03 · Guidance on the identification and assessment of nature-related issues: the LEAP approach - TNFD (Version 1.1, October 2023; webpage last updated June 2026). https://tnfd.global/publication/additional-guidance-on-assessment-of-nature-related-issues-the-leap-approach/

SRC-10 · Nature-related Disclosures project page - IFRS Foundation / ISSB (Current stage and July 2026 update). https://www.ifrs.org/projects/work-plan/biodiversity-ecosystems-and-ecosystem-services/

SRC-11 · ISSB Update - March 2026 - IFRS Foundation / ISSB (March 2026). https://www.ifrs.org/news-and-events/updates/issb/2026/issb-update-march-2026/

SRC-12 · ISSB Update - April 2026 - IFRS Foundation / ISSB (April 2026). https://www.ifrs.org/news-and-events/updates/issb/2026/issb-update-april-2026/

SRC-13 · ISSB Update - May 2026 - IFRS Foundation / ISSB (May 2026). https://www.ifrs.org/news-and-events/updates/issb/2026/issb-update-may-2026/

SRC-14 · ISSB agrees proposed way forward for nature-related disclosures - IFRS Foundation / ISSB (22 April 2026). https://www.ifrs.org/news-and-events/news/2026/05/issb-agrees-proposed-way-forward-nature-related-disclosures/

SRC-15 · ISSB welcomes TNFD's support as it advances nature-related disclosures - IFRS Foundation / ISSB (7 November 2025). https://www.ifrs.org/news-and-events/news/2025/11/issb-welcomes-tnfd-support-nature-related-disclosure/

SRC-16 · IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information - IFRS Foundation / ISSB (Issued June 2023; effective for periods beginning on or after 1 January 2024). https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/

Publication status: Source-grounded publication-ready draft - human technical sign-off pending. This article is educational material and does not replace the official TNFD, GRI or IFRS sources, legal advice or assurance procedures.