TNFD to conclude work as ISSB commences standard-setting for nature

The Taskforce on Nature-related Financial Disclosures (TNFD) will stop developing reporting rules and instead support the International Sustainability Standards Board (ISSB), it has said. 

The body will finish up its current technical work by Q3 next year, and refrain from developing any further guidelines as it hands the baton to ISSB. 

“Subject to the outcome of the ISSB’s standard-setting process on nature-related issues, likely in 2027, the TNFD would then conclude its technical work programme,” it said in a statement on Friday. 

The decision comes as ISSB confirmed it would start setting standards for “incremental disclosure requirements on nature-related risks and opportunities”. 

It will agree on its approach in the coming months, it added, and is considering various options, including “a mix of application guidance or amendments to existing ISSB standards, industry-based guidance, additional sources of guidance or a new standard”.   

The work will be based on TNFD’s framework, and will be subject to public consultation. 

An exposure draft is expected to be published in time for next year’s Convention on Biological Diversity, COP17, in October.  

The move has garnered the support of some of the world’s largest investors and companies, as well as the International Organisation for Standardisation, ISO. 

700+ TNFD adopters

It comes as the number of companies and financial institutions committed to publishing TNFD-aligned reports by FY2026 surpassed 700 – a 46% increase since last year.

Adopters now come from 56 jurisdictions and include publicly-listed companies with a combined market capitalisation of more than $9.4trn. 

Among the 733 firms are Tata Steel, Adani Ports, Pirelli, Burberry and Sanofi.

However, the World Business Council on Sustainable Development recently concluded that the number of companies referencing TNFD in their corporate reports had dropped by 2% over the past year. 

Based on analysis of 185 reports from across the world, the study found a general drop-off in references to nature-based frameworks, with the Science Based Targets Network getting 8% fewer mentions.

The report also noted that, while 23% of companies assessed claimed to align with the EU Corporate Sustainability Reporting Directive, just 4% said the same for ISSB. A further 25% indicated plans to align with the former, compared with 7% for the latter.

‘Keep using TNFD’ says ISSB

Speaking about the tie up between ISSB and TNFD, the chair of ISSB’s board, Emmanuel Faber, said he recognised the “clear investor need for information about nature-related risks and opportunities”. 

“Drawing on the TNFD framework enables us to meet this need efficiently, reducing fragmentation and building on leading practice.” 

He said companies should continue to use the TNFD framework to help them disclose in accordance with IFRS S1, and to make sure they’re prepared to meet ISSB’s future incremental requirements on nature.