The landscape of nature-related disclosure and reporting frameworks has evolved significantly. The International Sustainability Standards Board (ISSB) released its first batch of sustainability disclosure standards in June 2023, whilst the Taskforce on Nature-related Financial Disclosures (TNFD) also published its disclosure recommendations and guidance in September 2023.
Significant jurisdictions, including Australia, Brazil, Canada, and the United Kingdom, have announced their intention to adopt the ISSB standards over time, this is expected to widely influence nature reporting in the future. The ISSB intends to expand its coverage to nature in 2025. In addition, increased collaboration between initiatives is taking place, for example, between ISSB and TNFD, the Global Reporting Initiative (GRI) and TNFD, as well as GRI and ISSB.
The United Nations Environment Programme Finance Initiative (UNEP FI) is supporting this work by updating the Accountability for Nature report, expected in January 2025, and supporting its members in implementing this work, for example, via TNFD implementation support under the UNEP FI Risk Centre. At the national level, the three major Chinese stock exchanges recently unveiled mandatory ESG disclosures, including nature, for listed companies. This is recognized as a huge development to enhance nature data in the world’s second-largest economy.
Sustainable finance taxonomies that provide comprehensive classification systems and definitions are being developed or implemented in over 40 countries globally – an essential step for shared and scientific definitions of what constitutes sustainable economic activities. However, more and more sustainable finance taxonomies around the world are defining environmental objectives beyond climate change and social objectives.
A key challenge is ensuring consistency and interoperability between taxonomies across borders while considering the specificities of national and regional contexts. To enhance interoperability, the Working Group on Sustainable Finance Taxonomies of Latin America and the Caribbean (LAC) is developing a regional framework for nature-positive taxonomies with a focus on the conservation, restoration, and sustainable use of biodiversity and its ecosystems in LAC, to be launched at COP16.
The LAC Taxonomy Common Framework for Biodiversity will be the first of its kind and will offer a model framework to support countries in the region in developing their taxonomies in line with global best practices. This regional framework will support member states in encouraging capital flows toward common biodiversity-related goals and support cross-border investment.
Governance and due diligence obligations have also evolved to integrate biodiversity considerations. Regulatory bodies are increasingly expecting companies to not only be aware of their environmental impact but also actively manage and mitigate risks associated with biodiversity. This could include, for example, conducting thorough due diligence on supply chains to ensure that sourced materials are not contributing to habitat destruction or species extinction. The EU Corporate Sustainability Due Diligence Directive, adopted in 2024, also requires large European companies to identify, prevent and/or mitigate adverse impacts, including environmental impacts.
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