The Sustainability Multiverse: TNFD x ISSB Crossover Episode

The Sustainability Multiverse: TNFD x ISSB Crossover Episode

Amidst broader sustainability headwinds, there has been a significant step forward: the IFRS Foundation and the Taskforce on Nature-related Financial Disclosures (TNFD) have formalized their collaboration to enable nature-related financial disclosures for use by capital markets. This partnership, established through a new Memorandum of Understanding (MoU), will accelerate the integration of nature-related risks and opportunities into the work of the International Sustainability Standards Board (ISSB).

The two organizations will share research and technical expertise to inform ISSB’s standards and its Biodiversity, Ecosystems and Ecosystem Services (BEES) project, building directly on the TNFD’s recommendations. While the ISSB has supported the TNFD since its inception in 2021, this formal alignment marks a stronger commitment to reducing fragmentation in sustainability disclosures and advancing investor-grade nature reporting.

Originally focused on climate, the ISSB has slowly been expanding into nature – a natural progression as biodiversity and ecosystems emerge as critical sustainability concerns (see Nature And Biodiversity: Sustainability’s Next Frontier Is Here And Now). Across corporate and policy circles, there is growing recognition that nature loss directly impacts business resilience and long-term value creation.

Our 2024 global corporate survey found voluntary reporting to be among the top three priorities for half the firms surveyed in terms of funding. This underscores the growing significance of frameworks like the ISSB and the TNFD, as:

• ISSB standards have gained traction in over 30 jurisdictions, covering approximately 57% of global GDP and 40% of market capitalization (see Strategic Focus: ESG Reporting In The Age Of CSRD And ISSB). Countries like Japan and the UK are aligning their national disclosure frameworks with ISSB standards (see Hopping On The ISSB Bus: Japan Confirms Its Commitment To Voluntary Reporting and Strategic Focus: Understanding ESG And Sustainability Regulations In The UK).
  
  
• The TNFD has built strong momentum, with a network of 1,700+ institutions and over 520 adopters. While not yet mandatory, it has spurred investment in nature-related tools and expanded into regions like APAC (see The TNFD: Expansion And Exploring A New Frontier In APAC).
  
  

Interoperability between the TNFD and ISSB is key to simplifying the sustainability reporting landscape (cough, Omnibus, cough) and encouraging broader adoption of nature-related disclosures.

As momentum builds, businesses should proactively engage with the TNFD, align with ISSB standards and invest in internal capacity (see Addressing Nature And Climate Risks For Holistic ESG Risk Management). A growing ecosystem of consultants and data providers is also emerging to support this transition (see Market Insight: Nature Data And Analytics Emerge To Support Disclosures and Market Insight: The Nature Consulting Services Market).

Bottom line: nature is fast becoming a core tenet of sustainability. With the TNFD and ISSB joining forces, now is the time for firms to build capabilities and embed nature into their sustainability strategies.

For practical examples, please read Verdantix Takeda Forays Into Nature Impact And Risk Assessment With Arcadis and Verdantix Case Study: ENGIE Works With ERM To Strengthen Its Nature Analysis Using The LEAP Approach.