The ISSB's Nature Rules Are Coming as a Practice Statement, Not IFRS S3

The ISSB met on 21 July 2026 and approved balloting an exposure draft on nature-related disclosures. All twelve members agreed, none indicated an intent to dissent, and the comment period was set at 120 days (IFRS Foundation work plan).

The board is drafting an IFRS Practice Statement, not IFRS S3. In the work plan’s own words, the requirements “will supplement the requirements in IFRS S1 … and IFRS S2 … to be applied to nature-related risks and opportunities.” S1 and S2 themselves are not being amended.

Publication is targeted around the seventeenth Conference of the Parties to the UN Convention on Biological Diversity, in Yerevan in October 2026 (IPE). The content draws on the TNFD framework, whose adopter list has passed 730 organisations holding roughly US$22 trillion in assets under management (TNFD).

Japan and the EU end up in different places

A jurisdiction that adopts IFRS S1 and S2 does not automatically pick up a Practice Statement with them. It is a separate document, and each regulator decides on its own whether to adopt it.

Japan shows what that means in practice. The SSBJ’s standards, finalised in March 2025, are substantially equivalent to IFRS S1 and S2, and the Financial Services Agency has made them mandatory for Prime-market companies above ¥3 trillion market capitalisation from fiscal years ending March 2027, with ¥1 trillion-plus companies in 2028 and ¥500 billion-plus in 2029. No nature requirement rides in with that sequence, because the Practice Statement sits outside S1 and S2.

In the EU, biodiversity is already a reporting obligation under CSRD through ESRS E4, for companies in scope after the March 2026 Omnibus revision — over 1,000 employees and over €450 million turnover, applying from FY2027 with first reports in 2028.

A Japanese group with an EU-linked subsidiary can therefore end up with a binding nature disclosure in Europe and no equivalent requirement at home, for the same operations, in the same year.

Companies that expect to be in scope anywhere need their nature data before the exposure draft is final.

Location-specific information about water stress, land use and supply-chain exposure takes months to assemble, and no finance team puts it together in the weeks before a filing. A company that waits for its own regulator to adopt the Practice Statement begins collecting after the requirement lands.

Japan is further into this than most countries. Around 130 Japanese companies and financial institutions run nature-related assessments aligned with TNFD, more than anywhere else (Eco-Business). Those assessments are the raw material a Practice Statement disclosure would draw on, and a company that has not run one has further to go than the calendar suggests.

Check whether any entity in the group is already caught by ESRS E4 through CSRD. If one is, the group is producing nature disclosures in 2028 whatever the ISSB publishes in October. Check separately whether the location data behind a TNFD assessment exists for owned sites and for upstream suppliers. Deciding to report is not the same as holding the data. The 120-day comment period is open to companies that have attempted an assessment and found parts of it unworkable.

Nature disclosures will be read next to climate disclosures that are already subject to assurance in Japan from FY2028. A number that cannot be traced back to the file it came from is a problem in either dataset. Socious Report keeps every reported figure linked to the dataset it came from, and issues an independent Socious Verify credential on the finished report.

To see where your SSBJ reporting currently stands, start with the free readiness check at socious.io/ssbj-check.