On 22 October 2026, the International Sustainability Standards Board (ISSB) published an Exposure Draft of IFRS Sustainability Disclosure Practice Statement 1 Nature-related Disclosures. The Exposure Draft proposes requirements for disclosing information about nature-related risks and opportunities. Comments are due by 19 February 2027.
Why is this importantWhile the proposed Practice Statement has limited direct relevance to most New Zealand entities at present, it may be of interest to New Zealand entities that are following international developments in nature-related reporting. The proposed Practice Statement aims to help entities understand and communicate how their dependencies and impacts on nature give rise to risks and opportunities that could affect their prospects. |
The proposed Practice Statement is intended to assist entities applying IFRS Sustainability Disclosure Standards to disclose material information about nature-related risks and opportunities that could reasonably be expected to affect their prospects. It would complement IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures by specifying how particular IFRS S1 requirements apply to nature-related risks and opportunities and introducing additional nature-specific requirements.
A Practice Statement is not an IFRS Sustainability Disclosure Standard. An entity would not need to apply it to state compliance with IFRS Sustainability Disclosure Standards. However, an entity choosing, or required by a jurisdiction, to apply the Practice Statement would need to comply with all its requirements, and all the requirements of IFRS Sustainability Disclosure Standards, to state compliance with it. An entity could apply the Practice Statement only together with IFRS S1 and IFRS S2.
The proposals include requirements relating to:
The proposals draw on the Taskforce on Nature-related Financial Disclosures (TNFD) framework, which may assist entities already using that framework to apply the proposed requirements.
The ISSB is also seeking views on whether the requirements should be issued as a Practice Statement or in another form, such as amendments to IFRS S1 or IFRS S2 or a new IFRS Sustainability Disclosure Standard.
New Zealand’s mandatory climate-related disclosure framework requires climate reporting entities to report in accordance with climate standards issued by the XRB under the Financial Reporting Act 2013. The XRB does not have the power to issue binding general sustainability reporting standards or binding standards on sustainability-specific topics other than climate. It may, however, issue non-binding guidance relating to non-financial reporting, including environmental matters.
The proposed Practice Statement addresses nature-related risks and opportunities and is designed to be applied alongside IFRS S1 and IFRS S2. IFRS S1 requires entities to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect their prospects. The XRB cannot issue an equivalent of IFRS S1 as a mandatory standard but could issue it as non-binding guidance. The XRB has considered this option but has decided not to pursue it at this stage, as its current priority is the transition to an internationally aligned climate reporting framework.
The XRB considers that while the proposed Practice Statement has limited direct relevance to most New Zealand entities at present, it may be of interest to New Zealand entities that voluntarily apply IFRS S1 and IFRS S2 or are required to apply them because of overseas reporting requirements.
Nature-related risks and opportunities are also particularly relevant in the New Zealand context, and the consultation gives New Zealand stakeholders an opportunity to influence the ISSB’s international approach before it is finalised. Matters of particular relevance include interactions with Indigenous Peoples, Local Communities and affected stakeholders, and connections between climate- and nature-related risks and opportunities.
The XRB is expecting to respond to the consultation. If you are interested in feeding into an XRB submission, please contact us as soon as possible.
New Zealand stakeholders can also respond directly to the ISSB by completing its online survey or writing a submission letter.
If you do make a direct submission, please also email a copy to the XRB Sustainability team at sustainability@xrb.govt.nz. This will help inform the XRB’s submission and assist in a stronger and more cohesive New Zealand perspective to the ISSB.
Comments are due to the ISSB by 19 February 2027.
You can also participate in an Asian-Oceanian outreach session on 2 December 2026 at 7-8.30pm to receive an overview of the Practice Statement and to provide preliminary feedback. Please contact the Sustainability Reporting team at sustainability@xrb.govt.nz to register your interest in this session.
The consultation package contains the proposed requirements, questions for respondents, accompanying illustrative examples and the Basis for Conclusions.
The ISSB has also made available other supporting materials which can be found here.
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