Here’s a bit of timing that’s hard to miss. On 22 October, the UN’s big biodiversity summit was in full swing in Yerevan. That same week, the board behind global sustainability reporting standards dropped its first draft rulebook on nature. It’s the ISSB nature disclosures proposal, and if you care about where impact money goes, you’ll want to know what’s in it.
The short version? Companies may soon get a clear template for nature risk. It covers how much they depend on water, soil and healthy ecosystems, and what happens when those run short. So let’s walk through the draft, and why it matters a little extra for us here in Armenia.
So what actually happened?
The ISSB (International Sustainability Standards Board) sits inside the IFRS Foundation, the group behind many countries’ accounting rules. It launched in November 2021. Then in June 2023, it released IFRS S1 for general sustainability information and IFRS S2 for climate.
Nature was always the obvious next step. So on 22 October 2026, the board published an exposure draft. That’s a formal proposal anyone can comment on. Its full name is a mouthful: IFRS Sustainability Disclosure Practice Statement 1, Nature-related Disclosures.
You’ve got until 19 February 2027 to weigh in, which gives you a 120-day window. The ISSB prefers feedback through its online survey, though a comment letter works too.
Here’s what surprised a few people, though. This won’t be a brand-new standard. Back in April, the board picked a “Practice Statement” instead. It mainly wanted to avoid piling more work onto companies still busy rolling out S1 and S2.
Wait, why would investors care about bees and rivers?
Fair question. Picture a coffee company. If the farms it buys from lose their pollinators or their water, its costs jump and its supply shrinks. That’s a nature risk, and it lands right on the balance sheet.
In fact, ISSB chair Emmanuel Faber made this point in April. “Providing material nature-related disclosures is not optional; IFRS S1 already requires that,” he said. In other words, S1 already covers the nature risks that matter to a business.
The problem is that S1 and S2 don’t say how. Neither one has a nature-specific checklist. So every company ends up doing its own thing, and investors get reports they can’t compare. The new draft tries to fix that, focusing on what investors need, according to the IFRS project page.
Honestly, that’s the part we like most. Climate reporting got a common language years ago, while nature stayed a free-for-all. It’s the same issue we flagged in our look at how MSCI ESG ratings work. If everyone measures differently, the scores don’t tell you much.
What would ISSB nature disclosures actually ask for?
Based on the summaries we’ve read, including ESG Today’s, the draft covers four main areas.
- How companies are responding to nature-related risks and opportunities in their strategy and decisions, and how they plan to respond.
- How well their strategy and business model would hold up against the uncertainty those risks bring.
- The amount and percentage of their assets or business activities that are vulnerable to nature-related risks, plus those lined up with nature-related opportunities.
- Any nature-related targets, including location-specific details and whether a law or regulation shaped them.
That third point is the big one, if you ask us. A percentage is hard to fudge. It’s one thing to say you take biodiversity seriously. It’s another to admit that, say, a third of your sites sit next to stressed rivers.
Location matters a lot here too. Nature risk is local in a way carbon isn’t. So the ISSB added guidance with examples on disclosing where a company’s assets and activities actually are.
And if you know the TNFD, you’ll feel at home. That’s the Taskforce on Nature-related Financial Disclosures, and the ISSB drew heavily on its work. In fact, the TNFD wound down its own technical work after the ISSB announced its nature plans in 2025. The ISSB also says companies using GRI or Europe’s ESRS standards can apply the guidance alongside them easily.
Here’s the catch: it’s optional, for now
A Practice Statement isn’t mandatory. Companies wouldn’t need to follow it to say they comply with ISSB standards. But individual countries could still choose to make it compulsory, and that’s where things get interesting.
The board is also asking whether this should stay a Practice Statement at all. It could end up as a full standard instead. So the 120-day consultation isn’t a formality. It’s a real fork in the road.
Some investors have already pushed for a mandatory standard. Meanwhile, ISSB vice-chair Sue Lloyd sounded sympathetic to companies. “We recognise that companies are deeply engaged with applying IFRS S1 and IFRS S2 for the first time,” she said.
Our honest take? Optional rules tend to attract the companies that already look good. Still, the draft hands regulators a ready-made template. That’s often how voluntary things quietly become normal, just like Europe’s push to make impact funds show their work.
Why this lands differently in Yerevan
The timing is hard to ignore. COP17, the UN biodiversity conference, opened in Yerevan on 19 October with more than 10,000 delegates. It’s the first big check-in on the Kunming-Montreal Global Biodiversity Framework. That’s the 2022 deal with 23 targets for 2030.
And the check-in isn’t pretty. A UN report from 15 October found fewer than half of the assessed targets on track, as Down To Earth reported. Back in 2022, countries pledged to mobilise $200 billion a year for nature from all sources. That includes $30 billion in international public finance.
Here’s the link. You can’t move that kind of money without data investors trust. Nature reporting is the plumbing for nature finance, the same way clear labels matter for green bonds. “Yerevan is about accelerating action to protect nature,” said Astrid Schomaker, who leads the UN biodiversity convention’s secretariat.
For Armenian companies and the investors who back them, we think the takeaway is simple. If you’re raising money from international funds or development banks, expect more questions about water, land and biodiversity. Getting ready early is cheaper than scrambling later.
So what should you do with the ISSB nature disclosures draft?
First, don’t panic. Nothing here is binding yet, and the final form could still change.
Next, if nature is material to your business, look at the TNFD framework now. Over 700 organisations had adopted it by May, according to ISS-Corporate, and the ISSB draft builds on it. That means work you do today won’t go to waste.
Then think about location. Where are your sites, suppliers and farms, and what do they rely on? That question sits at the heart of the draft.
Finally, consider sending feedback before 19 February. Standard-setters rarely hear from smaller firms and emerging markets, so your voice actually counts here.
And here’s our open question for you. If ISSB nature disclosures become the norm, will they pull more impact money toward places like Armenia? Or will they just add one more form to fill in?