The IFRS Foundation and the Taskforce on Nature-related Financial Disclosures (TNFD) have announced that they have signed a Memorandum of Understanding (MOU) committing to build upon the TNFD recommendations in the ongoing work of the International Sustainability Standards Board (ISSB).
This will enable nature-related financial disclosures for use in the capital markets.
According to an April 9 announcement, the ISSB will consider the relevance of the TNFD recommendations in meeting the needs of global capital markets.
The ISSB has been a TNFD “knowledge partner” since the inception of the TNFD in late 2021.
The ISSB’s work had informed the TNFD recommendations, which were published in September 2023.
More recently, the TNFD has been supporting the ISSB’s Biodiversity, Ecosystems and Ecosystem Services (BEES) research project, which began in 2024.
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In February, the TNFD presented to ISSB members an overview of its work to date to enable further collaboration to be built on a foundation of common understanding.
The MOU signed earlier this week in Frankfurt will deepen the collaboration between the two organisations as the ISSB considers the TNFD recommendations in its research into the needs of global capital markets for information about nature-related risks and opportunities.
Erkki Liikanen, chair of the IFRS Foundation Trustees, says: “We are delighted to be formalising our partnership with TNFD to ensure that the ISSB gives due consideration to the work TNFD have put into creating recommendations for nature-related financial disclosures. Transparency and accountability are a key means of enabling more stable, resilient and efficient capital markets, and this collaboration will advance the ISSB’s ongoing work to reduce the complexity of the sustainability disclosure landscape, while building on established expertise and practice.”
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Sue Lloyd, ISSB vice-chair, says: “Our collaboration with the TNFD is a clear signal to the market that we are committed to reducing fragmentation in sustainability disclosure while meeting the need for relevant and high-quality information for capital markets. Strengthening the global baseline of sustainability disclosures with nature-related disclosures to meet investors’ information needs, including enhancing the industry-based SASB Standards, is a core focus of our work plan, and this ongoing collaboration and sharing of research and expertise will propel our work forward more effectively.”
David Craig, co-chair of the TNFD, says: “Like the TCFD before us, the TNFD was initiated ahead of specific reporting standards to develop market-based recommendations for decision-useful and practical corporate reporting practices on nature-related aspects beyond emissions.”
Craig adds: “Having engaged thousands of market participants in the development of our recommendations over the past four years from across 50 jurisdictions and with first-generation TNFD reports now published from among the 500 TNFD adopters, we welcome this deepened collaboration with the ISSB to inform their evolving sustainability reporting standards. One of the objectives of the TNFD is to help achieve Target 15 of the Kunming-Montreal Global Biodiversity Framework and we believe that better disclosures about nature issues, which will result from our collaboration with the ISSB, will support the achievement of that goal.”
Read more about how Singapore is adopting the ISSB standards:
- SGX RegCo will require ISSB-aligned climate-related disclosures from all listed issuers starting FY2025 (September 2024)
- ‘Huge momentum’ in Asia for ISSB adoption, says vice-chair of climate reporting standards body (September 2024)
- SGX RegCo launches consultation on incorporating ISSB standards into sustainability reporting rules (March 2024)
- Large private companies must report annual climate-related disclosures from FY2027: Acra, SGX RegCo (February 2024)
- SGX RegCo to seek feedback by year-end on mandating ISSB-aligned climate reporting (September 2023)
- ISSB standards 'best chance we have' at consistent sustainability reporting: SGX RegCo (July 2023)
- ISSB issues inaugural standards, creating common language for climate-related impact on companies (June 2023)
