The regulatory push to make nature a priority

Nature and biodiversity are rapidly moving from the margins of sustainability reporting to the centre of corporate governance.

Driven by global standard-setters and financial supervisors, the regulatory landscape is shifting away from siloed disclosures towards deep operational integration. For businesses, this means assessing nature-related risks not as a compliance exercise, but as a core component of  risk management and long-term strategy.

Standard-setters move to reduce fragmentation

That shift is visible in recent decisions by the International Sustainability Standards Board (ISSB), which has opted to develop its nature-related disclosure requirements as a non-mandatory 'Practice Statement' rather than a standalone standard. By anchoring these guidelines within the existing IFRS S1 framework, the ISSB aims to prevent compliance silos between climate and nature reporting. ISSB Chair Emmanuel Faber has made clear that reporting material nature-related risks remains compulsory under IFRS S1, with the Practice Statement being an application guide, not an escape clause. Following this decision, the Taskforce on Nature-related Financial Disclosures (TNFD) has concluded its technical work programme to avoid duplication.

Europe adjusts timelines while holding the line on substance

Jurisdictions are also adjusting implementation timelines. The European Commission has announced a review of the EU Deforestation Regulation (EUDR) ahead of its implementation deadline. The review is designed to reduce administrative burden without weakening the underlying legislation — focusing on clearer guidance, improved compliance IT systems, and refined product scopes, including the potential addition of soluble coffee and the exclusion of leather.

The ECB warns banks are underestimating nature risk

The European Central Bank (ECB) has also entered the picture, publishing an updated risk-management toolkit to address financial vulnerabilities linked to nature degradation. ECB Executive Board Member Frank Elderson warned that because frameworks for quantifying ecosystem collapse and biodiversity loss are still emerging, banks are significantly underestimating their physical exposure to environmental decline. The ECB is urging institutions to draw on public ecological datasets to build rigorous, quantitative risk models. Rather than divesting from high-impact sectors, the guidance pushes banks to use transition finance and pricing incentives to steer corporate clients toward nature-positive operations.

What this means for business

The direction of travel is clear: regulators are treating nature not as an add-on to climate reporting, but as a distinct and material financial risk. With key frameworks converging and enforcement deadlines approaching, businesses that have not yet mapped their supply chains for nature-related exposure are already behind. The question is no longer whether to act, but how fast.