IFRS Foundation and TNFD Unite to Enhance Nature-Related Financial Disclosure Standards

The IFRS Foundation and the TNFD have recently made headlines by signing a Memorandum of Understanding (MoU) that enhances collaboration aimed at improving nature-related financial disclosures in capital markets. This significant agreement, signed in Frankfurt, underscores both organizations’ commitment to integrating insights from the TNFD into the International Sustainability Standards Board’s (ISSB) ongoing projects.

Strengthening Sustainability Reporting

Since its establishment in late 2021, the TNFD has played a crucial role as a Knowledge Partner to the ISSB. The influence of the TNFD is reflected in various ISSB initiatives, particularly the Biodiversity, Ecosystems, and Ecosystem Services (BEES) research project, which commenced in 2024. The recommendations from the TNFD, derived from extensive consultations across 50 jurisdictions and over 500 adopters, are designed to enhance ISSB standards, with a focus on incorporating nature-related disclosures into industry-based SASB Standards.

Key Quotes from Leadership

Erkki Liikanen, Chair of the IFRS Foundation Trustees, expressed enthusiasm about the partnership, stating, “We are delighted to be formalizing our partnership with TNFD to ensure that the ISSB gives due consideration to the work TNFD has put into creating recommendations for nature-related financial disclosures. Transparency and accountability are essential for fostering stable, resilient, and efficient capital markets. This collaboration will help reduce the complexity of sustainability disclosures while building on established expertise.”

Sue Lloyd, ISSB Vice-Chair, reiterated the commitment to streamlined sustainability disclosures, saying, “Our collaboration with the TNFD signals our dedication to reducing fragmentation in sustainability reporting while providing relevant, high-quality information for capital markets.”

The Global Impact of TNFD

David Craig, Co-Chair of the TNFD, highlighted the global reach of their recommendations: “Having engaged thousands of market participants in developing our recommendations over the past four years, we welcome this strengthened collaboration with the ISSB to inform their evolving sustainability reporting standards.”

Razan Al-Mubarak, Co-Chair of the TNFD and President of the IUCN, emphasized the importance of integrating nature into financial reporting: “Nature is essential to our economies and our future. Our collaboration with the ISSB is a major step toward making nature visible in business reporting and capital allocation.”

Future Goals of the Collaboration

This enhanced collaboration between the ISSB and TNFD will focus on:

• Sharing research and expertise to refine the ISSB’s BEES initiative.
• Further developing nature-related aspects of SASB standards.
• Improving the quality of information available to investors.

The partnership not only aims to enhance investor transparency but also supports broader environmental objectives, including those outlined in the Kunming-Montreal Global Biodiversity Framework.

For more insights into sustainability reporting, visit our Sustainability Reporting page.