Yesterday I wrote about the ISSB’s draft practice statement for nature disclosures. The standard setter is holding a public consultation on these drafts, and opinions are already rolling in. The ISSB opted to make nature disclosures voluntary under a practice statement approach. However, fifteen financial institutions have already responded, indicating their preference for a mandatory nature disclosure standard:
“The Finance for Biodiversity Foundation and its members presented the joint statement to International Sustainability Standards Board (ISSB) Board member Sue Lloyd at COP17 following the launch of the ISSB consultation on nature-related disclosures. The signatories will engage in the consultation, and additional financial institutions are invited to support the statement until 15 January 2027.
Nature-related dependencies, impacts, risks and opportunities are financially material across sectors, geographies, and asset classes. Investors need consistent, comparable and decision-useful information to assess risks, allocate capital and fulfil their stewardship responsibilities. Voluntary action alone cannot deliver the global comparability needed.”
Investors and financial services firms naturally prefer more data. The more information available, the more informed choices financiers can make. However, investors don’t always get their way. The reporting burden placed on operating companies is the factor driving the voluntary approach. The feedback solicited from these companies is likely to weigh on the ISSB’s decision. We’ll see where the ISSB falls on the issue. Given that the organization received similar feedback months ago, it is possible they will remain unswayed by calls for a mandatory nature standard.
Our members can learn more about climate and nature disclosures here.
