The International Sustainability Standards Board (ISSB) has proposed new guidance to help companies disclose how their dependence on and impact on nature could affect their financial performance, opening a global consultation that could influence sustainability reporting by African businesses in mining, agriculture, manufacturing, tourism and finance. Published in October 2026 during the UN biodiversity conference, COP17, the proposed IFRS Sustainability Disclosure Practice Statement 1 on Nature-related Disclosures is intended to help companies provide investors with more consistent information about nature-related risks and opportunities. The consultation closes on 19 February 2027, with the ISSB seeking feedback on both the proposed guidance and whether it should ultimately take the form of a practice statement or a formal standard.
The proposals come as investors increasingly assess how environmental conditions can affect the financial prospects of companies. Water scarcity can disrupt industrial production, soil degradation can reduce agricultural productivity, and the loss of forests or other ecosystems can affect tourism, supply chains and access to natural resources. These pressures can translate into higher operating costs, interruptions to production, regulatory exposure and uncertainty over long-term investment returns.
For African economies, where many industries depend directly on land, water, minerals and biodiversity, the implications extend beyond corporate reporting. Companies may need to demonstrate how environmental risks could affect their operations, while lenders and investors require comparable information to assess exposure across sectors and markets. The quality of that information can influence how capital is allocated and how businesses plan for changes in resource availability, environmental regulation and market expectations.
The ISSB, which operates under the IFRS Foundation, developed the proposals to provide additional guidance on applying its existing sustainability disclosure requirements. Companies applying IFRS S1, the general standard for sustainability-related financial information, are already required to disclose material sustainability-related risks and opportunities that could reasonably affect their prospects, including those related to nature. The new proposals are intended to clarify how companies can identify and communicate that information, rather than introduce a separate reporting system detached from existing climate and sustainability disclosures.
The proposed guidance draws extensively on the work of the Taskforce on Nature-related Financial Disclosures (TNFD), which developed recommendations for assessing and reporting nature-related dependencies, impacts, risks and opportunities. It also seeks to connect nature-related information with climate disclosures and financial statements, allowing investors to understand how different sustainability pressures may affect the same business.
For an African mining company, for example, water availability, land disturbance, biodiversity impacts and relationships with nearby communities may affect operating continuity, compliance costs and the viability of future projects. An agricultural exporter may face risks from declining soil quality, changing rainfall patterns or the loss of pollinators. A tourism operator may depend on the condition of wildlife habitats and protected landscapes. Under the proposed approach, companies would need to consider which of these issues could be financially material and provide information relevant to investors.
The emphasis on materiality is significant. The proposals are not intended to require companies to report every environmental impact regardless of its relevance to their prospects. Instead, they seek to improve disclosure of nature-related information that matters to investors, including how a company’s activities depend on ecosystems and how changes in those ecosystems could affect its business. The framework also recognises the importance of location-specific information and interactions with Indigenous Peoples, local communities and other affected stakeholders where these matters are material.
For African companies, the practical challenge will be assembling reliable information across operations and supply chains. Businesses may need data on water use, land conditions, ecosystem dependencies and the potential financial consequences of environmental degradation. Some large companies already collect environmental information through internal risk systems or existing sustainability reports. Smaller businesses and suppliers may have fewer resources, limited access to technical expertise and less developed systems for tracking environmental performance.
These differences could affect the ability of African companies to respond to investor requests consistently. Businesses seeking international finance or operating within global supply chains may face growing pressure to demonstrate how nature-related risks are assessed and managed. Where data is incomplete or difficult to compare, investors may struggle to evaluate exposure across companies, while firms may find it harder to explain how environmental conditions affect their financial outlook.
The proposed practice statement is not mandatory under the ISSB framework in its current form. The board has chosen this approach partly to avoid disrupting jurisdictions and companies that are still implementing IFRS S1 and IFRS S2, the standards covering general sustainability-related financial disclosures and climate-related disclosures. Companies would not have to apply the practice statement to claim compliance with ISSB standards, although individual jurisdictions could decide to require its use. The consultation will also consider whether nature-related disclosure.
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That distinction matters for African regulators and standard-setters considering how international sustainability requirements should be adopted locally. A consistent global framework could make it easier for investors to compare businesses across markets, but implementation will require decisions about reporting obligations, timelines, assurance, data quality and support for companies with limited technical capacity. Regulators will also need to consider how nature-related disclosures interact with existing national environmental laws and sustainability reporting requirements.
Financial institutions could have a role in this transition. Banks, insurers and investment managers are exposed to nature-related risks through the companies and projects they finance. Deteriorating water availability, ecosystem loss or restrictions on land use can affect borrowers’ revenues, asset values and ability to repay loans. More consistent disclosure could help financial institutions identify these exposures, although reporting alone will not eliminate the underlying environmental risks or replace due diligence at project level.
African governments and businesses will also need to consider the cost of producing the required information. Nature-related assessments can require geospatial data, ecological expertise, operational records and engagement with communities around project sites. Where these resources are expensive or unavailable, companies may struggle to produce disclosures that are both useful to investors and proportionate to their circumstances. Shared data systems, sector guidance, professional training and cooperation between regulators, financial institutions and industry groups could help reduce duplication and improve reporting quality.
The consultation therefore provides African stakeholders with an opportunity to influence how the guidance develops. Companies, accounting bodies, regulators, investors and civil society organisations can assess whether the proposals reflect the realities of operating in markets where environmental data may be fragmented and where communities depend directly on natural resources. Their feedback could help shape a framework that improves investor information without imposing unnecessary reporting costs or overlooking the conditions in which African businesses operate.
The broader issue is how nature-related information becomes useful to economic decision-making. Disclosure cannot by itself prevent water shortages, restore degraded land or protect biodiversity. Its value lies in helping companies, investors and lenders identify material risks earlier, compare exposures more consistently and account for environmental dependencies when making financial decisions.
As the ISSB reviews feedback ahead of the February 2027 deadline, the implications for Africa will depend on the final form of the guidance and how jurisdictions choose to apply it. For businesses whose operations depend on ecosystems, nature is not simply an environmental concern: it can affect production, costs, market access and investment. Better reporting could make those connections more visible to capital markets, provided African institutions and companies have the capacity to produce credible information and use it in practice.
