Frankfurt - The United Nations Development Programme (UNDP) and the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV), through the International Climate Initiative (IKI), announced their support to the IFRS Foundation and the International Sustainability Standards Board (ISSB)'s Nature-related Disclosure Projects. This marks a new phase in the UNDP-IFRS Foundation partnership.
This new funding will enable the ISSB to strengthen its collaboration with the Taskforce on Nature-related Financial Disclosures (TNFD), ensuring nature-related issues are embedded in corporate and investment decision-making. By aligning with TNFD recommendations and IKI's vision to integrate biodiversity into financial systems, the ISSB aims to support market resilience and meet investors' information needs around nature-related risks and opportunities. The support, provided over the next year, will help ISSB determine what further actions are needed to meet the demands of capital markets for biodiversity disclosures, including building on TNFD's recommendations.
Marcos Neto, UN Assistant Secretary-General and Director of UNDP's Bureau for Policy and Programme Support stated, "Understanding nature-related dependencies, impacts, risks, and opportunities is key to integrating nature into our economic and financial systems. The collaboration between the private sector, governments, Indigenous Peoples, local communities, international organizations, and NGOs is crucial for advancing progress on international standards that recognize the interconnection between business, Nature, and societal well-being."
Biodiversity, Ecosystems and Ecosystem Services (BEES) are critical components of natural capital that directly impact economic activities and corporate operations. These elements underpin essential functions like pollination, water purification, and climate regulation, which, in turn, influence business risks and opportunities. The ISSB's Nature-related Disclosure Projects are a significant step toward identifying and addressing the needs of capital markets for nature-related disclosures.
The new project will explore how companies' dependencies and impacts on nature can lead to risks and opportunities, helping markets better price these factors, building on the Sustainability Accounting Standards Board (SASB) Standards, and IFRS S1 and IFRS S2. It will also collaborate closely with the Global Reporting Initiative (GRI) to align with GRI 101 Biodiversity Standards enabling double materiality factors to be considered. Finally, the project will enhance SASB Standards, with a phased focus on nature-intensive sectors and BEES-related metrics.
Elke Steinmetz, Head of Division for International Cooperation on Biodiversity (BMUV), said: "The partnership between ISSB and TNFD is a timely and important step towards integrating nature into mainstream corporate reporting. As the world moves to implement the Kunming-Montreal Global Biodiversity Framework, clear and consistent nature-related disclosure will be essential for aligning financial flows with global sustainability goals. The German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) is proud to support the implementation of the TNFD recommendations in selected partner countries through the International Climate Initiative (IKI). In this context, BMUV is also pleased to support the cooperation between ISSB and TNFD through the IKI-TNFD project. These efforts help equip businesses and financial institutions to better understand their dependencies and impacts on nature - and to actively contribute to aligning financial flows with biodiversity and a nature-compatible global economy."
Emmanuel Faber, ISSB Chair, said: "We are grateful to UNDP for their partnership on the ISSB's work on nature-related financial disclosures. Our research so far has shown us that investor interest in nature-related disclosures is rapidly developing though nascent, with considerable variation among industries. Building on our ongoing partnership with TNFD, we will continue to consider how to utilise their recommendations as we work to strengthen our global baseline of sustainability disclosures."
Since 2022, UNDP and the IFRS Foundation have been cooperating through a Partnership Framework for Capacity Building signed at COP27 in 2022, followed by a Letter of Intent in 2024, to pursue collaboration in advancing global sustainability disclosure convergence and promoting and facilitating the creation of supportive environments conducive to integrating sustainability disclosure standards. This collaboration is carried out through UNDP's Sustainability Disclosure and Management Hub (SDMH) programme, which supports countries in developing internationally aligned frameworks. The new focus on nature-related disclosure further deepens and expands this partnership.
