Sri Lankan companies already report on their emissions, their workers and their exposure to climate risk. Few say anything about how much they depend on nature, or how much of it they use up. That may soon change. In October 2026, the International Sustainability Standards Board (ISSB), the IFRS Foundation’s body for global sustainability-reporting rules, is due to publish a draft standard on nature-related disclosure for public comment. It draws on the Taskforce on Nature-related Financial Disclosures (TNFD), a voluntary framework set up in 2020 by the UN Development Programme and other agencies.
The TNFD starts from the premise that nature is a financial risk. A tea estate needs steady rainfall; a factory needs groundwater that the rains can refill. Fresh water, fertile soil, pollination and healthy forests are inputs to production, even though none appears on a balance sheet.
Sri Lanka’s current rules do not capture this. The 100 largest listed companies by market capitalisation must report sustainability and climate risks under SLFRS S1 and S2, standards issued by CA Sri Lanka, and almost all other listed firms are being brought in. These disclosures must show how environmental and social factors affect cash flows, access to finance and the cost of capital. Many firms also report under the Global Reporting Initiative (GRI), an older and broader framework covering general environmental and social impact. None of these requires a company to measure its dependence on nature or its depletion of it.
“Most of our companies are still reporting on GRI, and the task force for nature, TNFD, is little known among them. There’s a huge void there,” said Shiranee Yasaratne, senior technical adviser to Biodiversity Sri Lanka, at the Biodiversity Action Forum 2026. She was joined on the panel by Saurabh Kumar, a counsellor at the CII-ITC Centre of Excellence for Sustainable Development in New Delhi; Nishan de Mel, executive director of Verité Research; Ruchira Somaweera, national technical executive for ecology at WSP Australia; and Siddarth Hirdaramani, a director of both the Hirdaramani Group and Biodiversity Sri Lanka.
What exactly is TNFD, and having worked on India’s own biodiversity reporting, how is it different from the mandatory rules already in place there?
Kumar: TNFD stands for the Taskforce on Nature-related Financial Disclosures. It asks a company to assess and report its risks, opportunities, impacts, and dependencies related to nature, structured around four areas: governance, strategy, risk management, and targets.
India’s mandatory rule, BRSR, already covers general sustainability, but not nature specifically. We published guidance showing companies how to fold TNFD’s structure directly into BRSR, so a company reports both in one place instead of filing two separate reports.
How does TNFD differ from what Sri Lankan companies already report, and who is furthest along?
Yasaratne: Most of our companies still report under GRI, an older, broader standard, and many have folded climate risk into their SLFRS S1 and S2 filings. TNFD is different: it specifically asks a company to report its dependence on nature and its impact on it, not general sustainability or climate. That is still little known here. The plantation sector is furthest along, since it deals directly with land, forests and biodiversity, but for most other sectors, there is a huge void.
Which industries stand to gain the most from reporting this kind of information?
Hirdaramani: Apparel is a clear one. Global brands like Nike and Victoria’s Secret already choose Sri Lanka partly for our environmental reputation, and clear nature disclosure only strengthens that case with buyers who increasingly ask for it. It matters for financing too. Banks are starting to offer better loan terms to companies that meet sustainability targets, so being able to report this clearly has a direct financial upside, not just a reputational one.
What kind of companies actually need this level of detail, and what does building it look like?
Somaweera: I have designed monitoring programmes like this for governments, large corporations and mining companies, sectors where the physical footprint on land is unavoidable. Doing it properly needs a baseline, a before-and-after picture, and comparison sites tracked over time, what scientists call a BACI study, before-after-control-impact. That is what is missing in most Sri Lankan assessments. Without it, you cannot tell whether a company added new biodiversity value, or simply restored what was already there, which are two very different achievements.
You’ve said this is not a pollution problem but a classification problem. What did you mean?
de Mel: Companies depreciate a machine or a building on their books because it wears out. National accounts do the same for roads and machinery, but never for forests, fisheries or watersheds. A country can clear its forests, sell the timber, and watch its GDP go up, because the loss of that forest is never subtracted anywhere.
That gap now has a price. A 2020 study by the World Economic Forum and PricewaterhouseCoopers found that $44 trillion of global economic output depends moderately or highly on nature. By 2023, that figure had risen 30%, to $58 trillion. Less than 15% of that exposure sits in a company’s own operations. Most of it sits several tiers up the supply chain, where a business cannot see it and cannot control it.