Short answer
The answer, before the reasoning
UK SRS S1 already captures material nature-related risks and opportunities through its general requirements. The entity should examine how it depends on and affects natural resources throughout the value chain, translate those dependencies and impacts into risk and opportunity pathways, and apply investor materiality.
TNFD's recommendations and LEAP approach can support identification, location analysis and assessment, but they are not mandatory UK SRS requirements. The ISSB's nature project had moved towards an exposure draft by August 2026, but no final ISSB or UK nature-specific standard had been issued.
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London Reporting Academy · Working publication package · 2 August 2026
Quick orientation
Quick orientation
- Applies to
- Entities with material dependencies or impacts involving water, land, ecosystems, species or ecosystem services.
- Primary decision
- Which nature-related information is material to primary users because it affects prospects.
- Key UK source
- UK SRS S1 paragraphs 1-3, 29-59 and application guidance B2-B10.
- Supporting framework
- TNFD Recommendations and LEAP approach, used voluntarily and proportionately.
- Common confusion
- Assuming that a nature impact is automatically UK SRS material or that TNFD is a compliance prerequisite.
Nature is already within the general UK SRS S1 scope
UK SRS S1 does not need a dedicated nature chapter before nature-related disclosure can be required. Its objective covers all sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects. Application guidance explains that the entity both depends on and affects resources and relationships, including natural resources, throughout the value chain. Those dependencies and impacts can create risks and opportunities affecting cash flows, access to finance or cost of capital.
The standard gives water as a direct example: degradation or depletion of a resource can disrupt operations and affect financial performance and position, while preservation or regeneration can create positive effects. The same logic can be applied to land, soil, forests, oceans, pollination, ecosystem condition and species where the facts support a pathway to the entity's prospects.
In practice
1. Key concepts
| Concept | Working meaning | Why it matters for UK SRS |
|---|---|---|
| Dependency | An aspect of nature or an ecosystem service the entity relies on, directly or through the value chain. | Loss of availability, quality or affordability can create operational and financial risk. |
| Impact | A positive or negative change to nature caused, contributed to or linked to activities and relationships. | The impact can create regulatory, market, legal, reputational or physical consequences for the entity. |
| Risk driver | The mechanism that converts a dependency or impact into exposure. | Examples include scarcity, ecosystem degradation, policy change, litigation, customer preference or financing conditions. |
| Nature-related risk | A physical, transition or systemic consequence that could affect the entity's prospects. | The risk enters the UK SRS disclosure process when it could affect prospects and the related information is material. |
| Nature-related opportunity | A potential benefit from efficient resource use, restoration, resilient sourcing, new products or improved access to finance. | The opportunity is assessed with the same discipline and without overstating uncertain benefits. |
| Priority location | A place where dependencies, impacts or risks are particularly significant because of ecological sensitivity or business exposure. | Location can be essential to understanding concentration, severity and financial pathways. |
2. From dependencies and impacts to risks and opportunities
A nature assessment should not begin with a generic list of biodiversity topics. It should begin with the business model, value chain and locations. The entity identifies where operations, products, suppliers, customers or financed activities depend on nature or affect nature, then describes the pathway to a potential consequence for the entity.
1. Identify the business activity, product, facility or value-chain relationship.
2. Identify the natural resource, ecosystem service, species or ecosystem condition involved.
3. Record the dependency and impact pathway, including location and affected stakeholders where relevant.
4. Identify the risk driver: physical change, regulation, market expectations, legal action, reputation, technology or systemic effects.
5. Translate the driver into a risk or opportunity for the entity, such as disruption, input cost, asset impairment, capex, product demand or finance effects.
6. Assess time horizons and whether the risk or opportunity could reasonably be expected to affect prospects.
7. Identify material information for primary users and connect it to the four UK SRS content areas.
The pathway should be specific enough to challenge. A statement that 'biodiversity loss is a risk' is not sufficient. A stronger record might explain that the entity depends on a crop requiring pollination, that supplier regions are experiencing ecosystem decline, that alternative sourcing is limited, and that the resulting volume and price volatility could affect margins and customer contracts over the medium term.
3. Using TNFD LEAP as optional support
TNFD's LEAP approach - Locate, Evaluate, Assess and Prepare - provides a structured way to identify and assess nature-related dependencies, impacts, risks and opportunities. It is particularly useful where location and value-chain complexity make a conventional enterprise-risk workshop too abstract.
An entity can apply LEAP proportionately. A first-year assessment might screen priority sectors, commodities and locations, then perform deeper analysis for the most plausible exposures. The report should explain the scope, data limitations and planned expansion rather than implying complete global ecological measurement.
Visual: nature-related risk pathway and current status
The diagram shows dependencies and impacts becoming risk drivers, financial pathways and UK SRS disclosures. TNFD LEAP supports the assessment, while the ISSB project remains an emerging source rather than a final requirement.
In practice
| LEAP phase | Useful UK SRS input | Control question |
|---|---|---|
| Locate | Business footprint, value-chain interfaces, priority locations and sensitive ecosystems. | Have we identified where the dependency, impact or exposure actually occurs? |
| Evaluate | Nature dependencies and impacts, their scale and condition, and supporting data. | Do we distinguish measured evidence from estimates and proxies? |
| Assess | Risk and opportunity pathways, likelihood, magnitude, time horizons and existing controls. | Can the pathway to prospects and financial effects be explained? |
| Prepare | Strategy response, governance, metrics, targets, reporting and improvement plan. | Does the disclosure answer UK SRS information needs rather than merely reproduce a TNFD checklist? |
4. Materiality under UK SRS S1
The organisation does not report every identified nature dependency or impact under UK SRS S1. It discloses material information about nature-related risks and opportunities that could reasonably be expected to affect prospects. Materiality is assessed in the context of the entity's general purpose financial reports and considers whether omission, misstatement or obscuring could influence primary-user decisions.
Nature information can be qualitatively material even before a precise monetary effect is available. Location in a protected or water-stressed area, exposure to a single ecosystem-dependent commodity, potential loss of a key permit, emerging litigation or a strategic dependence on restoration can be important because of the nature and potential magnitude of the matter. The entity should document why the information is or is not material and how uncertainty was handled.
In practice
| Assessment question | Evidence examples | Possible output |
|---|---|---|
| Could the dependency or impact disrupt operations or supply? | Site data, supplier geography, ecological condition, substitution options, contracts. | Physical risk, concentration and resilience disclosure. |
| Could policy, litigation or market expectations change costs or demand? | Permit conditions, regulation watch, claims, customer requirements, lender policies. | Transition risk, strategy response and financial-effects narrative. |
| Could the issue affect assets, liabilities or capital allocation? | Impairment indicators, remediation obligations, capex plans, provisions, acquisition due diligence. | Current and anticipated financial effects, including qualitative or range information where appropriate. |
| Could a nature-positive response create an opportunity? | Efficiency projects, restoration partnerships, product pipeline, customer demand, finance terms. | Opportunity description, assumptions, investment and progress metrics without unsupported benefit claims. |
5. Sources of guidance and metric selection
UK SRS S1 requires the entity to apply UK Sustainability Reporting Standards. For non-climate nature matters without a dedicated UK standard, it applies judgement to identify relevant and faithfully representative information. The final UK text permits reference to SASB disclosure topics and metrics, CDSB water and biodiversity guidance, other investor-focused standard-setter materials, industry and regional peers, and - where useful and non-conflicting - GRI and ESRS.
The entity must identify the sources and industries actually applied. This creates a source-governance obligation: record the edition, reason for selection, definitions adopted, departures or adaptations, and why the resulting information meets the UK SRS objective.
A defensible nature metric set
• Metrics should be linked to a material risk, opportunity, dependency, impact pathway or target - not selected because they are fashionable.
• Industry-associated metrics should reflect the business model and locations; SASB may be considered but is not mandatory under UK SRS S1.
• Location-based metrics can be more decision-useful than group totals where ecological context drives risk.
• Entity-specific metrics should disclose definition, absolute or relative form, method, inputs, assumptions, limitations and third-party validation where applicable.
• Targets should state metric, boundary, baseline, period, milestones, progress and revisions.
• Gross activity and outcome indicators should not be confused: hectares restored, supplier assessments completed and ecological condition achieved measure different things.
In practice
| Metric family | Illustrative metric | Required context |
|---|---|---|
| Dependency / exposure | Revenue, production or assets dependent on a priority ecosystem service or commodity. | Method for identifying dependency, locations, time horizon and limitations. |
| Pressure / impact driver | Water withdrawal, land conversion, pollution load or high-risk commodity volume. | Boundary, source, location, unit, estimation and relation to risk. |
| Risk management | Share of priority sites or suppliers assessed and subject to response plans. | Coverage denominator, assessment criteria and evidence of implementation. |
| Outcome / condition | Change in ecological condition or water availability at priority locations. | Baseline, scientific method, attribution limitations and external factors. |
| Finance / strategy | Capex committed to resilience, restoration or alternative sourcing. | Approval, time period, financial-statement connection and expected result. |
In practice
6. Disclosure by UK SRS content area
| Content area | Nature-related questions | Evidence |
|---|---|---|
| Governance | Who oversees nature-related risks? What skills, information flows and controls support oversight? | Terms of reference, board papers, skills assessment, committee minutes, control descriptions. |
| Strategy | Where are risks concentrated? How do they affect business model, value chain, decisions, financial effects and resilience? | Location analysis, sourcing strategy, financial plans, capex, scenarios and trade-off records. |
| Risk management | How are dependencies, impacts, risks and opportunities identified, assessed, prioritised and monitored? | Methodology, LEAP scope if used, risk register, thresholds, integration with enterprise risk management. |
| Metrics and targets | Which measures explain exposure, response and performance? What changed and why? | Data dictionary, calculation files, baseline, target approval, progress analysis and limitations. |
7. Hypothetical example: beverage manufacturer
The group uses a proportionate LEAP-style screen to identify priority facilities and commodities. It combines water-stress data, permit conditions, supplier origin, certification evidence, community complaints, production dependency and financial planning. The screen identifies one bottling plant with high production concentration and limited water alternatives, and one ingredient supply chain with potential regulatory and customer exposure.
The UK SRS assessment describes the pathway from water dependency and catchment pressure to potential permit restrictions, production disruption, capex and margin effects. For the ingredient, it considers traceability, deforestation regulation, customer requirements, alternative sourcing and brand risk. The entity concludes which information is material to primary users and records the judgements and uncertainty.
The disclosure explains governance, priority locations, risk-management integration, sourcing response, current and anticipated financial effects, and selected metrics. It labels ecological estimates and avoids claiming that supplier certification alone proves no nature impact. A separate impact report may provide broader GRI information, but the UK SRS section remains focused on material risks and opportunities.
8. Emerging ISSB guidance: how to describe it
The ISSB began nature-related work after its agenda consultation and moved the project into standard-setting. In July 2026 the ISSB discussed due-process steps and permission to ballot an exposure draft of a proposed IFRS Practice Statement on nature-related disclosures. The project page identified an exposure draft as the next milestone.
This is important future-facing guidance, but it is not a final requirement. An exposure draft invites comment and can change. A proposed Practice Statement would also need to be assessed for its status and interaction with IFRS S1 when finalised. UK use would depend on any future UK assessment, endorsement or regulatory decision.
In practice
9. Common mistakes
| Mistake | Why it fails | Correction |
|---|---|---|
| Waiting for a dedicated UK nature standard | Material nature risks are already within UK SRS S1's general scope. | Use the general risk and opportunity process now and maintain a regulatory watch. |
| Reporting a global biodiversity score without location context | Nature risk is often location-specific and the aggregate can obscure concentration. | Identify priority locations, methods and limitations. |
| Equating impacts with UK SRS materiality | Not every impact is material to primary users; the pathway to prospects must be assessed. | Retain impact evidence, then apply the UK investor-materiality test. |
| Treating TNFD as mandatory | UK SRS S1 does not require TNFD by name. | Describe TNFD or LEAP as a voluntary source or methodology actually used. |
| Choosing metrics before identifying risk pathways | The metric set becomes generic and may not explain the material exposure. | Start with business model, locations, dependencies, impacts and financial pathways. |
| Claiming restoration outcomes from activity data | Actions do not prove ecological condition or causal effect. | Separate activity, output, outcome and attribution evidence. |
| Calling the ISSB project a final standard | The project was at exposure-draft stage, not final issuance or UK endorsement. | Date and label the project status accurately. |
Readiness
10. Nature-readiness checklist
- • The business model, facilities, products, commodities and value-chain relationships have been screened for nature dependencies and impacts.
- • Priority locations and ecological context are recorded where location drives exposure.
- • Dependencies and impacts are connected to specific risk and opportunity pathways for the entity.
- • Time horizons and potential effects on cash flows, finance and cost of capital are assessed.
- • UK SRS materiality is documented separately from impact materiality or TNFD prioritisation.
- • TNFD LEAP scope, adaptations and limitations are disclosed if the method is used.
- • Sources of guidance, industry basis and metric selection rationale are version-controlled.
- • Metrics distinguish exposure, pressure, activity, outcome and financial response.
- • Estimates, proxies, uncertainty and data gaps are visible and linked to an improvement plan.
- • Governance, strategy, risk management, metrics, targets and financial effects are connected in the final disclosure.
- • The ISSB project is described as emerging and dated; no final UK nature requirement is implied.
Primary sources
UK SRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. February 2026, especially paragraphs 1-3, 29-59, B2-B10 and Appendix C Official source
TNFD Recommendations. September 2023 Official source
TNFD LEAP approach guidance. Guidance on identifying and assessing nature-related issues, version 1 Official source
ISSB Nature-related Disclosures project. Current project status and July 2026 update Official source
ISSB proposed way forward for nature-related disclosures. May 2026 announcement and expected exposure draft Official source
GRI 101: Biodiversity 2024. Optional impact-reporting source under UK SRS Appendix C where useful and non-conflicting Official source
Questions
Questions people ask
Does UK SRS S1 require nature disclosure?
UK SRS S1 requires the entity to apply UK Sustainability Reporting Standards. For non-climate nature matters without a dedicated UK standard, it applies judgement to identify relevant and faithfully representative information. The final UK text permits reference to SASB disclosure topics and metrics, CDSB water and biodiversity guidance, other investor-focused standard-setter materials, industry and regional peers, and - where useful and non-conflicting - GRI and ESRS.
Is TNFD mandatory under UK SRS?
The entity should examine how it depends on and affects natural resources throughout the value chain, translate those dependencies and impacts into risk and opportunity pathways, and apply investor materiality. TNFD's recommendations and LEAP approach can support identification, location analysis and assessment, but they are not mandatory UK SRS requirements.
How do impacts become nature-related financial risks?
UK SRS S1 already captures material nature-related risks and opportunities through its general requirements. The entity should examine how it depends on and affects natural resources throughout the value chain, translate those dependencies and impacts into risk and opportunity pathways, and apply investor materiality.
Has the ISSB issued a final nature standard?
TNFD's recommendations and LEAP approach can support identification, location analysis and assessment, but they are not mandatory UK SRS requirements. The ISSB's nature project had moved towards an exposure draft by August 2026, but no final ISSB or UK nature-specific standard had been issued.
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