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ISSB begins work on nature and human capital disclosures

"Feedback indicated a significant and growing need among investors for improved disclosures around biodiversity..."
Melodie Michel
ISSB begins work on nature and human capital disclosures
Photo by Robert Lukeman on Unsplash

The International Sustainability Standards Board (ISSB) is beginning research on potential new disclosures around biodiversity, nature and human capital, with the goal of harmonising the sustainability data shared with investors on these topics.

The organisation – whose IFRS S1 and IFRS S2 are some of the most widely used sustainability disclosure standards – says its decision was informed by “recent consultations on future priorities”, confirming that nature-related risks are a growing area of focus for investors.

“Beyond climate, we are committed to building out the global baseline of sustainability-related financial disclosure to meet the needs of investors. Feedback indicated a significant and growing need among investors for improved disclosures around biodiversity, ecosystems and ecosystems services as well as human capital, as a key source of value for companies,” said ISSB Chair Emmanuel Faber.

The research projects aim to determine the type of information investors need to assess nature and human capital risks within their portfolios, and will draw from existing initiatives, including the Task Force on Nature-related Financial Disclosures (TNFD).

(More than 300 companies in 46 countries have already committed to publishing nature-related disclosures in the next two years using the TNFD framework.)

Read also: Time for Chief Sustainability Officers to ‘get started’ on nature disclosures

ISSB: Beyond climate disclosures

The disclosure of “all” sustainability-related risks and opportunities is already required under IFRS 1, beyond just climate information. Companies are asked to refer to sources such as the industry-specific SASB standards, to identify the most relevant information to report on.

ISSB will also build on these current disclosures to determine whether more specific nature and human capital-related disclosures are required, with a work plan for the next two years to be published in June.

“Our industry-specific SASB Standards continue to be used as a cost-effective way of providing decision-useful information to investors. We are committed to enhancing the SASB Standards further given they will also support our new research areas,” added Faber. 

The organisation adds that it “decided not to embark” on projects related to human rights beyond a company’s own workforce and workers in its value chain, as well as projects around reporting integration at this time, based on market feedback. 

“However, the ISSB agreed to closely monitor developments in these important areas and may consider including them in a future agenda consultation,” ISSB noted in a statement.