Integrating nature into UK corporate reporting – how should businesses respond to the IPBES business and biodiversity assessment and recent UK national security assessment?

UK National Security Assessment on Global Ecosystems: nature is the foundation of national security

Before IPBES published its report in February 2026, the UK Department for Environment, Food and Rural Affairs (“DEFRA”) published the National security assessment on global ecosystems: a national security assessment. The document assesses (i) what the most significant implications of global biodiversity loss and ecosystem collapse are for UK national security, (ii) which are the most critical ecosystems for UK national security and (iii) the impact of the collapse of an individual critical ecosystem on UK national security. The documents complement each other in offering an urgent rationale for government, society and businesses to understand how nature affects them and giving examples and information as to how to act.

Using scientific sources and expert judgement to assess reasonable worst case scenarios, the national security assessment identifies nature as the foundation of national security as we depend on nature for water, food, clean air and critical resources. It tells a story of ever more scarce natural resources driving greater competition between state and non-state actors “exacerbating existing conflicts, starting new ones and threatening global security and prosperity”. It states that if “current rates of biodiversity loss continue, every critical ecosystem is on a pathway to collapse”. And the timescales considered are not hundreds of years but five to twenty-five years.

IPBES Business and Biodiversity Assessment: Less than 1% of publicly reporting companies mention their impacts on biodiversity in their reports

IPBES’ summary for policymakers on the impact and dependence of business on biodiversity and nature’s contributions to people¹ (the “Business and Biodiversity Assessment”) explains that loss of biodiversity and the services provided by nature is a “critical systemic risk threatening the economy, financial stability and human wellbeing”. It identifies that the true value of nature to society is not currently recognized in the global economic system. This results in activities which are profitable for businesses often resulting in loss of biodiversity with system-level implications.

We, businesses and society, need biodiversity and the services provided by nature. The key message is that businesses need to understand their impacts and dependencies on nature and to be accountable and transparent about them. But the current external conditions in which businesses operate are not always compatible with achieving a just and sustainable future. Nature needs to be internalized into the economic system so that growth no longer comes at the expense of nature.

Therefore, although businesses can be (and may want to be) positive agents of change and influential in markets, the economic environment that they operate in does not currently incentivize them to take actions which would be beneficial for biodiversity. For example, many countries have policies, such as subsidies for fossil fuels, agriculture, water, transport and forestry , which “either encourage business activities harmful to biodiversity or prevent behaviour beneficial for biodiversity”². IPBES reports that in 2023, global public and private finance flows with direct negative impacts on nature were estimated to be at $7.3 trillion, whilst flows for conservation and sustainable use of biodiversity were $220 billion.

As a first step businesses need to understand how and to what extent they are dependent on nature. The IPBES found that generally, businesses do not have the data and knowledge capacity to quantify their impacts and dependencies on biodiversity. The summary offers a number of suggestions to improve this situation. They include:

• better engagement with scientific findings and indigenous and local knowledge, methods and practices to apply the learnings and better the systemic and cross-silo effects of nature loss, to effectively improve business decision-making; and
• clear and stable national policy which aligns business incentives and priorities with conservation and restoration of biodiversity and ecosystem services so that business can invest in nature and act to mitigate their dependencies on nature;
• to address gaps in their knowledge base: facilitating the integration of scientific knowledge on nature into business accounting and management systems;
• to collect and share comparable information, including through disclosure mechanisms, activities and locations of businesses, their operations and value chains; and
• to collaborate with indigenous peoples and local communities to upskill methods and knowledge.

What do businesses need to do now – current requirements?

Moving from TCFD…

In the UK, certain companies, such as large and listed companies and asset managers currently need to provide Task Force on Climate-related Financial Disclosures (“TCFD”)-aligned reporting in their annual reports (see our briefing here). The focus of TCFD is, as the name implies, primarily disclosure of climate-related risks and opportunities. Although the nature and climate crises can both pose material financial risks and impacts for companies, this framework does not specifically reflect the risks, impact dependence and opportunities related to nature – though of course where financial risks are material, companies are required to report on them in their annual financial reports.

…to TNFD… to a global standard

The Taskforce on Nature-related Financial Disclosures (“TNFD”) is a voluntary framework for assessing and disclosing nature-related impacts, dependences, risks and opportunities and their interconnection. The TNFD recommendations have a wider remit than the TCFD and are built on the TCFD framework structure (see here for more information about its application).

But the landscape is moving.

The International Sustainability Standards Board (“ISSB”) (under the auspices of International Financial Reporting Standards) recently announced that it is working on a specific nature-related standard for the ISSB framework, which will draw heavily on the work of the TNFD (including TNFD recommendations, metrics and additional guidance including the LEAP approach). The first exposure draft is expected in September/October 2026.

In October 2024, the Climate Financial Risk Forum’s Resilience Working Group published Nature-related Risk: Handbook for Financial Institutions which is written by financial institution practitioners to support risk identification and strategy for climate and/or the environment. It includes case studies on pilots financial institutions are running to assess nature-related risks and opportunities across the portfolio and emerging practice for incorporating nature into risk management frameworks.

Although the UK does not yet have specific mandatory nature-related reporting, it is currently consulting on the introduction of ISSB sustainability standards (IFRS S1 and IFRS S2) into the Financial Conduct Authority Listing Rules to replace the TCFD-aligned reporting (and large companies and asset managers) and has previously indicated that it will consider nature-related reporting.

It therefore seems likely that specific nature-related disclosures will be required for large and listed UK companies and asset managers in the UK at some point in the future – and this is likely to be replicated across the globe through ISSB uptake.

What nature-related disclosures requirements do businesses need to consider?

• IFRS S1 and S2: These standards do not specifically cover nature but there are elements of climate which strongly intersect with climate-related disclosures and therefore it is possible that nature-related matters may be required to be disclosed. IFRS has produced educational material considering nature and social aspects of climate-related risks which explains the application of this intersection in more detail.
• IFRS financial reporting: We note that nature is also relevant as part of the existing IFRS financial reporting framework. In this article, the Institute of Chartered Accountants in England & Wales reviews nature touchpoints in existing financial reporting requirements, including their relevance in IAS 1, 2, 16, 36, 37, 38 and 41.

So if nature-related risk assessment and disclosure is not mandatory why start now?

Apart from the warnings of the IPBES and national security assessments, there are a number of reasons why companies may wish to begin assessing nature-related risks under the TNFD LEAP framework, these include determination of material financial risks for fulfilling fiduciary duties and for the purposes of reporting under IAS and IFRS S1 and S2 and for general risk management.

Once the risk assessments have been made then companies can then (i) integrate these risks into their existing risk management frameworks, (ii) decide how, and if, to mitigate risks and dependencies and minimise impacts on nature, (iii) consider how to harness the opportunities and (iv) decide whether to publicly disclose in line with TNFD or other established nature reporting framework.

Once companies understand how nature fits within their business strategy they can also integrate nature into their transition plans.

Conclusion

There are compelling arguments to assess nature-related risks, opportunities, impacts and dependencies and, regardless of regulatory requirements for all companies. For example, ensuring effective business strategy in a changing world, risk management and fulfilment of fiduciary duties. Businesses can see nature-related reporting coming down the track and so are acknowledging the benefits of starting their assessments and monitoring of nature-related risks, opportunities, impacts and dependencies, in order to prepare for any future mandatory nature-related disclosure in the UK and further afield as part of the ISSB workplan.

If you are considering starting climate- and/or nature-related disclosure, please get in touch so that we can help to support you through the process. Our global Sustainable Finance & Investment group brings a multidisciplinary global legal team that provides clients with best-in-market support with a science unit which can help clients to understand the data behind the reporting.

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This note is intended to be a general guide to the latest ESG developments. It does not constitute legal advice.

Authored by Emily Julier, Bryony Widdup, and Rita Hunter.