TNFD to stop work as ISSB kicks off standard-setting on nature

The Taskforce on Nature-related Financial Disclosures (TNFD) is to wrap up its technical work because the International Sustainability Standards Board (ISSB) is stepping in to address unmet investor information needs relating to nature.

Ahead of COP30’s official start today, the ISSB on Friday said that, drawing on the TNFD framework, it would carry out standard-setting to introduce “incremental” disclosure requirements on nature-related risks and opportunities where these were not already reflected in its general (S1) and climate-related (S2) disclosure standards.

It aims to have an exposure draft of its proposals, which may or may not involve a new standard, ready by the next UN biodiversity summit, COP17, in October 2026.

Investors welcomed the ISSB’s announcement.

“As long-term investors, we need harmonised and financially relevant reporting on nature to inform our ownership and investment decisions,” said Carine Smith Ihenacho, chief governance and compliance officer at Norges Bank Investment Management.

“TNFD’s work has been instrumental in building the foundation for nature-related disclosures, and we will continue to support both TNFD and ISSB as they work together.”

The TNFD has said that it will complete all of its technical work in progress, including the development of additional sector guidance, by Q3 2026, and refrain from developing further guidance as it switches to focusing on supporting the ISSB’s work programme.

“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,” the TNFD said on Friday.

Emmanuel Faber, chair of the ISSB, said he encouraged market participants to continue using the TNFD framework, and it “will help them prepare disclosures in accordance with IFRS S1 and prepare for meeting future incremental ISSB disclosure requirements”.

Published in their final form in September 2023, the TNFD recommendations have been adopted by 733 organisations, including over $9trn (€7.8trn) in market capitalisation among listed companies and over $22trn in assets under management.

Deforestation: new IIGCC platform to continue FSDA work

Meanwhile, the Financial Sector Deforestation Action (FSDA) initiative is also preparing to wind down, making way for a Deforestation Investor Group (DIG) that the Institutional Investors Group on Climate Change (IIGCC) will launch in January 2026.

The FSDA was launched at COP26 in Glasgow, bringing together more than 30 financial institutions that made a commitment to work towards eliminating commodity-driven deforestation from their investment and lending portfolios by 2025.

Norah Berk, IIGCC senior programme manager for nature, said that the FSDA had set the benchmark for investor ambition on deforestation, achieving significant progress on its milestones.

She told IPE that DIG would build on this momentum by providing a platform for investors to share best practices, integrate deforestation into net zero strategies, and maintain tracking of progress to ensure real-world impact.

“Having seen the progress made within FSDA, DIG will enable more investors to tackle deforestation by integrating it into their net zero strategies, engaging with companies and banks, and advancing systems transformation,” said Berk.

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