The International Sustainability Standards Board (ISSB) has released proposed guidance on nature-related disclosures, marking a further development in global sustainability reporting and reinforcing the need for businesses to understand how their dependence on the natural environment could affect their financial performance, resilience and long-term prospects. For African businesses, this development is particularly relevant as many sectors depend on natural resources and ecosystem services that are increasingly exposed to environmental pressures. Understanding these dependencies is becoming an important part of assessing business risks, protecting assets and supporting long-term value creation.
Published on 22 October 2026, the exposure draft, IFRS Sustainability Disclosure Practice Statement 1, Nature-related Disclosures, is designed to help companies provide investors with more meaningful information about nature-related risks and opportunities. Drawing extensively on the work of the Taskforce on Nature-related Financial Disclosures (TNFD), the proposals seek to clarify how companies can identify and disclose material nature-related dependencies, impacts, risks and opportunities.
The announcement reflects a growing recognition that businesses must consider the broader environmental factors that influence their performance, including water availability, soil quality, biodiversity and the health of ecosystems on which their operations depend.
ISSB Chair Emmanuel Faber highlighted this relationship, noting:
“Whether it is access to water for production, to rivers for transportation or to bees for pollination, companies around the world depend on nature. When a company’s access to these environmental resources is threatened, the company can face risks and opportunities that affect its prospects. We believe companies that comply with an IFRS Sustainability Practice Statement on nature-related disclosures will be best placed to provide high-quality reporting to their investors.”
These dependencies can have direct financial implications when environmental degradation or resource scarcity disrupts operations, increases costs or undermines supply chain reliability. For businesses across Africa, such pressures may also affect agricultural productivity, access to essential raw materials, infrastructure reliability and the long-term value of land and other physical assets. Recognising these connections can help organisations identify vulnerabilities before they translate into significant operational or financial consequences.
What has the ISSB proposed?
The exposure draft takes the form of a proposed Practice Statement intended to complement IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2, Climate-related Disclosures. While IFRS S1 already requires companies applying the standard to disclose material sustainability-related risks and opportunities, the proposed guidance provides additional direction on addressing nature-related matters.
The proposals cover governance, strategy, risk management, and metrics and targets, including how companies respond to nature-related risks, assess the resilience of their business models, identify assets or activities exposed to such risks, and report on relevant targets. The guidance also recognises the importance of location-specific information, given that nature-related dependencies and impacts often vary according to the ecosystems and environments in which businesses operate.
ISSB Vice-Chair Sue Lloyd acknowledged that companies are already navigating the implementation of the existing sustainability standards, with the proposed approach seeking to balance this transition with investors’ demand for better nature-related information.
The ISSB also said that it has worked to ensure that companies that apply the Global Reporting Initiative (GRI) Standards or European Sustainability Reporting Standards (ESRS) alongside the Practice Statement can do so efficiently. The ISSB is consulting on the proposals, including whether the final guidance should remain a Practice Statement or take another form. The consultation closes on 19 February 2027. Read the exposure draft and consultation materials.
What businesses need to know
For businesses, the development presents an opportunity to assess whether their existing sustainability reporting and risk management processes adequately capture material dependencies on nature and the potential financial consequences of environmental change. Although the proposals are still under consultation, African businesses can use this period to understand their exposure to nature-related risks and assess whether their current systems are equipped to identify, manage and report material information.
Companies should begin by identifying the natural resources and ecosystem services essential to their operations and supply chains, assessing where significant exposures exist, and determining how these could affect operating costs, asset values and long-term business prospects. An agricultural business, for instance, may be exposed to declining soil productivity, while a manufacturer may face operational disruptions associated with water scarcity.
These considerations should be integrated into existing governance, reporting and enterprise risk management processes rather than treated as a separate compliance exercise. Businesses will also need to consider whether their current data systems can provide reliable information about the location and significance of relevant exposures, particularly where risks arise through suppliers, assets or other parts of the value chain.
For African businesses, the starting point does not have to be an entirely new reporting system. Organisations can begin by reviewing the environmental information they already collect, identifying gaps in their data, clarifying responsibilities for monitoring relevant risks and incorporating material nature-related considerations into existing business and risk assessments. This approach can help build reporting capacity progressively while ensuring that the information collected is relevant to business decisions.
Financial institutions and investors should also consider how nature-related exposures within their portfolios could influence investment performance, asset values and the resilience of the businesses they finance. For lenders and investors, this may involve considering whether a borrower or investee company depends heavily on natural resources, whether environmental pressures could affect its ability to operate or generate cash flows, and how effectively these risks are being managed. Incorporating such considerations into due diligence and portfolio monitoring can support a more informed assessment of risk and long-term value.
Building Readiness for Nature-Related Disclosures
As sustainability disclosure expectations evolve, organisations will need more than an awareness of emerging standards; they will need the knowledge, processes and reliable data required to assess their exposures and report material information effectively.
For organisations seeking to strengthen their sustainability reporting capabilities, access to relevant training and practical resources will be essential. Through its IFRS Sustainability Disclosure Standards training and the resources available on its app, The CircularNet provides opportunities for businesses and sustainability professionals to deepen their understanding of the standards, build internal capacity and begin establishing processes for tracking relevant sustainability data. As reporting expectations evolve, these resources can help organisations improve data management and prepare disclosures aligned with applicable reporting requirements.
For organisations that have yet to establish structured sustainability data collection processes, building capacity can begin with understanding what information is relevant, determining where that information can be obtained and establishing clear processes for collecting and maintaining reliable data. As the ISSB’s nature-related proposals progress, businesses can use this period to review existing practices and identify areas where their reporting systems may need to evolve.
Ultimately, the value of nature-related disclosure lies not simply in meeting reporting expectations, but in understanding how environmental dependencies could affect business performance and using that insight to inform strategic and investment decisions.
With the ISSB consultation open until 19 February 2027, businesses and other stakeholders have an opportunity to engage with the proposals while preparing for a reporting landscape in which nature-related risks and opportunities receive greater attention.
To explore sustainability reporting resources and learning opportunities, download The CircularNet app on Google Play or the App Store, or follow The CircularNet for further insights and updates on sustainability and ESG.