The International Financial Reporting Standards (IFRS) Foundation and the Task Force on Nature-related Financial Disclosures (TNFD) have signed a formal agreement to accelerate the integration of nature-related impacts into the International Sustainability Standards Board (ISSB) standards. This move is set to strengthen the global sustainability reporting landscape. Continue reading as we shed light on what the TNFD and ISSB standards agreement will mean for corporate sustainability.
A step toward unified sustainability reporting
The Memorandum of Understanding (MoU) will see the IFRS Foundation and TNFD expand their ongoing partnership to ensure nature-related disclosures become a key part of ISSB’s evolving standards. The collaboration will directly inform the ISSB’s Biodiversity, Ecosystems and Ecosystem Services (BEES) project, and influence nature considerations within the SASB Standards, which underpin IFRS S1 and S2.
IFRS S1 provides a general framework for sustainability disclosures, while IFRS S2 focuses specifically on climate-related risks and opportunities. Both were designed to build on existing frameworks like the Taskforce on Climate-related Financial Disclosures (TCFD), and now, with this latest agreement, the standards will evolve to reflect the growing urgency of nature-based risks.
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Growing market alignment on nature
This development comes amid rapidly growing market alignment around nature-related risk reporting. As of October 2024, more than 500 businesses and financial institutions, representing $6.5 trillion in market capitalisation and $17.7 trillion in assets under management, have committed to adopting the TNFD framework by the end of the 2025 financial year. To support this growing demand, TNFD has launched new sector-specific guidance and learning platforms to help organisations understand, measure, and disclose nature impacts effectively.
Implications for global standards
This partnership signals a continued trend toward harmonising sustainability disclosure frameworks at a global level. The IFRS Foundation has already partnered with EFRAG to ensure alignment between ISSB standards and the European Sustainability Reporting Standards (ESRS).
Now, with nature firmly on the agenda, the collaboration with TNFD provides further clarity and consistency for capital markets. The integration of TNFD’s guidance into ISSB standards will allow businesses to align with both investor expectations and emerging regulation, while reducing the reporting burden caused by fragmented frameworks.
Looking ahead
This collaboration reflects a deeper shift in how we define corporate value. The business world is beginning to understand that nature is not a separate issue from climate; it’s the foundation on which our economies and societies depend. As the regulatory and investor landscape rapidly evolves, companies that integrate nature into their risk assessments and strategies will gain a crucial edge. While they report for compliance, they will also be preparing for resilience, innovation, and long-term growth in a nature-positive economy.
