Companies have spent several years improving climate-related reporting, calculating greenhouse gas emissions, and assessing transition risks. A wider reporting challenge is now moving into focus. Businesses increasingly need to understand how their operations, assets, supply chains, and financial performance depend on nature.
Nature-related disclosures are becoming part of mainstream sustainability reporting because biodiversity loss, water stress, land degradation, ecosystem disruption, and resource dependency can influence business continuity and long-term value creation. These issues affect access to raw materials, operating costs, asset performance, supply-chain resilience, insurance exposure, regulatory risk, and investor confidence.
The International Sustainability Standards Board has moved its nature-related disclosure project into standard-setting. Companies should begin preparing their internal systems before the next reporting expectations become more detailed.
Nature has often been treated as a broad environmental topic with limited connection to financial reporting. This approach is becoming increasingly difficult to maintain.
Businesses rely on ecosystem services in direct and indirect ways. Agriculture depends on soil quality, water availability, and pollination. Construction relies on materials, land-use planning, and water systems. Energy projects can affect land, marine environments, and biodiversity. Hospitality and tourism depend on environmental quality and resilient destinations. Financial institutions face exposure through the companies, sectors, and assets they finance.
The economic relevance is substantial. The World Economic Forum estimated that US$44 trillion of economic value generation, representing more than half of global GDP at the time of its analysis, was moderately or highly dependent on nature and its services.
The World Bank has estimated that the collapse of selected ecosystem services, including wild pollination, marine fisheries, and timber from native forests, could reduce global GDP by US$2.7 trillion annually by 2030.
These findings provide an important business signal. Nature-related issues can influence commercial performance, financial resilience, and investment decisions. They require management attention that is proportionate to the organisation’s exposure.
In April 2026, the International Sustainability Standards Board announced that it had agreed to propose requirements for nature-related disclosures through an IFRS Practice Statement.
The ISSB intends to publish an exposure draft for public comment in October 2026. This will allow stakeholders to review the proposed requirements and comment on whether an IFRS Practice Statement is the appropriate form of standard-setting.
The proposed Practice Statement is expected to complement:
The planned Practice Statement will explain how companies can provide material information about nature-related risks and opportunities when applying IFRS S1. It is intended to support implementation while companies and jurisdictions continue adopting IFRS Sustainability Disclosure Standards.
This distinction matters. The ISSB is not starting from an empty reporting landscape. The ISSB has clarified that IFRS S1 already requires material information about sustainability-related risks and opportunities, including nature-related risks and opportunities that could reasonably be expected to affect a company’s prospects.
Companies applying IFRS S1 should therefore consider whether nature-related issues are already financially relevant to their businesses.
Nature-related issues require a broader assessment than biodiversity reporting alone. Businesses need to understand how their operations interact with natural systems and how environmental changes can affect their performance.
The Taskforce on Nature-related Financial Disclosures uses four connected categories: dependencies, impacts, risks, and opportunities.
Category | What It Means | Business Example | Potential Financial Relevance |
Dependencies | Natural resources and ecosystem services required for business activity | A manufacturing facility requires reliable water availability for production and cooling | Higher costs, operational disruption, reduced capacity |
Impacts | Positive or negative effects caused by the organisation or its value chain | A construction project affects land use, habitats, and local water systems | Permitting delays, remediation costs, stakeholder concerns |
Risks | Potential threats arising from dependencies, impacts, and environmental change | A supplier faces water scarcity, soil degradation, or ecosystem disruption | Supply shortages, price volatility, business continuity risk |
Opportunities | Commercial and strategic benefits from improved nature-related performance | A company redesigns products, procurement systems, or sites to reduce resource pressure | Efficiency gains, stronger market access, improved resilience |
These categories help companies move from broad environmental statements toward decision-useful analysis.
A food business may need to assess crop dependencies and water exposure. A real-estate developer may need to consider land use, habitat sensitivity, flood exposure, and resource efficiency. A financial institution may need to understand nature-related risks within its lending or investment portfolio. A logistics company may need to assess port, marine, and infrastructure dependencies.
The correct starting point depends on the company’s sector, business model, geographic footprint, and value chain.
The ISSB’s nature-related disclosure work is drawing upon the TNFD framework. In April 2025, the IFRS Foundation and TNFD signed a Memorandum of Understanding to deepen their cooperation and support high-quality nature-related information for capital markets.
The TNFD recommendations were published in September 2023. They contain 14 recommended disclosures structured around four familiar pillars:
TNFD Pillar | Core Question for Businesses |
Governance | Who oversees nature-related dependencies, impacts, risks, and opportunities? |
Strategy | How could nature-related issues affect the business model, strategy, and financial planning? |
Risk and Impact Management | How does the organisation identify, assess, prioritise, and monitor nature-related issues? |
Metrics and Targets | Which measures and targets are used to evaluate performance and track progress? |
This structure gives companies a practical way to organise their preparation for nature-related disclosures. It also supports consistency with existing governance and reporting systems used for climate-related disclosures.
The framework has gained meaningful adoption. The United Nations Development Programme reports that more than 500 organisations had committed to adopting the TNFD recommendations by 2025.
One of the most useful elements of the TNFD framework is the LEAP approach. LEAP helps organisations identify and assess nature-related issues through a structured process.
LEAP Stage | Purpose | Practical Questions |
Locate | Identify where the organisation interfaces with nature | Where are the company’s assets, suppliers, and value-chain activities located? Which locations are environmentally sensitive? |
Evaluate | Understand dependencies and impacts | Which natural resources and ecosystem services support operations? How do business activities affect water, land, habitats, and biodiversity? |
Assess | Evaluate risks and opportunities | Which issues could affect costs, revenue, assets, supply chains, compliance, and reputation? |
Prepare | Develop the response and reporting approach | Which governance controls, metrics, targets, disclosures, and action plans are required? |
In May 2026, the ISSB discussed the relevance of the LEAP approach for companies preparing nature-related disclosures under IFRS S1. The ISSB tentatively decided that the proposed Practice Statement should note that LEAP may support companies when they identify nature-related risks and opportunities.
The ISSB also clarified that the LEAP approach is intended as a useful support mechanism. It is not expected to become the only permitted method for demonstrating compliance.
This provides companies with an important degree of flexibility. Organisations can use the TNFD LEAP approach while adapting the depth of assessment to their sector, resources, reporting maturity, and material exposures.
Climate-related reporting often relies on company-wide emissions inventories and transition scenarios. Nature-related analysis requires a stronger location-specific lens.
Water stress, biodiversity sensitivity, habitat conditions, land-use pressures, and ecosystem dependencies vary significantly by location. Two facilities with similar production profiles may face very different nature-related risks because they operate in different environmental contexts.
A company assessing nature-related disclosures should map:
This analysis does not require every company to build a complex environmental data platform immediately. A phased approach can begin with priority assets, material business lines, and critical value-chain relationships.
The ISSB’s May 2026 discussions reinforce this direction. The board tentatively decided that nature-related resilience assessments should recognise the location-specific and asset-specific characteristics of nature-related risks and opportunities.
Nature-related reporting has practical relevance for businesses operating in the UAE and the wider GCC.
The region has significant exposure to water scarcity, heat stress, coastal systems, land-use pressures, food-security considerations, and resource-intensive infrastructure. The World Bank describes the Middle East and North Africa as the world’s most water-scarce region, with climate change placing further pressure on water security, land sustainability, food security, and ecosystems.
Businesses in the region also operate through global supply chains. A company may have limited direct exposure at its UAE office while facing material nature-related risk through imported materials, agricultural products, manufacturing suppliers, overseas assets, or financed activities.
This makes value-chain mapping important for sectors such as:
Companies should assess the specific nature-related issues that could affect their operating model rather than applying a generic checklist across every sector.
Companies do not need to wait for the ISSB exposure draft before starting their preparation. A structured readiness programme can reduce reporting pressure and improve the quality of future disclosures.
Step 1: Define Governance Responsibility
Assign clear responsibility for nature-related risk assessment. Boards and senior management should understand how nature-related issues connect with enterprise risk, sustainability reporting, procurement, operations, and investment decisions.
The governance model should clarify:
Step 2: Identify Priority Business Activities
Review the organisation’s business model, assets, and value chain. Determine which activities have the strongest dependencies on water, land, ecosystems, raw materials, and environmental quality.
Priority-setting is essential. Companies should begin with the areas that could have the greatest financial or operational relevance.
Step 3: Map Locations and Value Chains
Create an initial map of key facilities, suppliers, projects, and operating regions. Identify environmentally sensitive locations and areas exposed to water stress, ecosystem disruption, land-use pressure, or biodiversity concerns.
Supplier engagement may be necessary where material exposure sits outside direct operations.
Step 4: Assess Dependencies, Impacts, Risks, and Opportunities
Use the TNFD categories and LEAP approach to structure the assessment. Determine how nature-related issues could affect revenue, costs, assets, financing, business continuity, and reputation.
The assessment should include realistic time horizons and clear prioritisation criteria.
Step 5: Review Existing Data and Identify Gaps
Many organisations already hold relevant information across environmental assessments, procurement systems, water records, facility-management data, supplier questionnaires, and enterprise-risk registers.
A readiness review should identify which data can be used immediately and where new measurement processes are required.
Step 6: Select Metrics and Reporting Boundaries
Metrics should match the company’s material exposures. A water-intensive manufacturer may require detailed water metrics. A financial institution may need portfolio-level screening. A property developer may need land-use, habitat, and project-level indicators.
The reporting boundary should be clearly defined so that disclosures remain understandable and decision-useful.
Step 7: Build a Phased Improvement Plan
Nature-related reporting maturity develops over time. Companies should document immediate actions, medium-term data improvements, governance enhancements, and future disclosure goals.
This creates a defensible pathway for improving nature-related disclosures as expectations evolve.
Companies should maintain a careful balance between transparency and evidence quality.
A disclosure should explain the scope of the assessment, the reporting boundary, the data sources used, the assumptions made, and the limitations that remain. Where information is incomplete, the organisation should explain how it plans to strengthen its processes.
Companies should also avoid broad environmental claims that cannot be supported by reliable data. Nature-positive language, biodiversity commitments, and restoration claims require clear definitions, measurable baselines, and credible reporting methods.
Nature-related reporting should connect with business decisions. The strongest disclosures explain how environmental dependencies and risks influence strategy, risk management, investment planning, procurement, and operational controls.
IFRS S1 already requires companies applying the standard to disclose material sustainability-related risks and opportunities that could reasonably affect their prospects. This includes material nature-related risks and opportunities. The forthcoming IFRS Practice Statement is expected to provide additional guidance on how companies can make these disclosures.
Climate-related disclosures focus on climate risks, transition risks, physical risks, greenhouse gas emissions, and climate resilience. Nature-related disclosures cover a wider set of dependencies, impacts, risks, and opportunities connected with biodiversity, ecosystems, water, land, and natural resources. The two areas are closely connected and should be assessed in an integrated way.
The TNFD recommendations are a voluntary risk-management and disclosure framework. They provide a useful structure for companies preparing nature-related disclosures. Reporting requirements depend on the applicable jurisdiction, reporting framework, and materiality assessment.
Companies with significant exposure to water, land, natural resources, agriculture, infrastructure, construction, energy, tourism, manufacturing, and complex supply chains should begin assessing their readiness. Financial institutions should also consider the nature-related exposure within their lending and investment portfolios.
The first step is a focused readiness assessment. The organisation should identify priority assets, major dependencies, high-risk locations, key suppliers, and existing data sources. This creates a practical foundation for a phased reporting plan.
IFRSLAB supports businesses in developing practical and decision-useful sustainability reporting systems.
Our advisory support can include:
A structured starting point can help your organisation move from broad environmental commitments toward credible and reportable action.
Connect with IFRSLAB to assess your readiness for nature-related disclosures and build a practical pathway for the next stage of sustainability reporting.
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