In short: The International Sustainability Standards Board (ISSB), the arm of the IFRS Foundation responsible for global sustainability reporting standards, has opened public consultation on a proposal requiring companies to disclose nature- and biodiversity-related financial risks in the reports they already prepare under IFRS S1 and IFRS S2. Over the same period, the GHG Protocol (Greenhouse Gas Protocol, the leading global framework for emissions reporting) postponed its stricter rules for Scope 2, the category covering emissions from purchased energy, after 80% of the companies consulted opposed the hourly and geographic matching requirements. And Brazilian Law No. 15,506/2026, signed on September 16, made traceability an explicit requirement in critical mineral supply chains for the energy transition. Taken one at a time, the three moves look out of step. Read together, they describe how buyers, investors and regulators are building a verification model that will not wait for a unified standard before it starts demanding evidence.
The proposal the ISSB published at COP17, the UN biodiversity conference held in Yerevan, Armenia, is not a new standard. It is a practice statement, an application guide for IFRS S1, the general sustainability standard that dozens of countries, Brazil included, have already adopted as a reference. Adoption is voluntary. But the public consultation, open until February 19, 2027, asks whether this guide should remain an amendment to S1 or take another form, possibly a formal standard.
That question matters because it signals direction before the format changes. The ISSB would not need to consult on the legal status of a document unless there were enough pressure to elevate it to a standard. Organizations such as the Nature Positive Initiative (NPI) are already asking for exactly that.
What the ISSB is asking companies to show
Location is the backbone of the proposed text. Companies must identify nature-related risk factors across their value chain, including water-stressed areas, high-biodiversity zones and regions that matter to local communities and Indigenous peoples.
The requested metrics go beyond what S2 set for climate. The framework asks for the value and percentage of assets or activities located in nature-sensitive areas, the dependence on ecosystem services such as water for production and pollination for agriculture, and the impacts the company generates on those same services. Scenario analysis is mandatory, but it can be proportionate to company size, including a qualitative format for smaller companies.
What ties this text to how a supply chain actually works is the governance point: the company must show how it takes into account the positions of Indigenous peoples, local communities and other groups affected by its operations. That cannot be verified through self-declaration. The European buyer already asking for supplier due diligence evidence in Tier 1 contracts is about to receive an expanded version of that questionnaire.
ISSB Chair Emmanuel Faber described the reasoning behind the proposal in a statement: "Whether it is access to water for production, rivers for transport or bees for pollination, companies around the world depend on nature. When a company's access to these environmental resources is threatened, it may face risks and opportunities that affect its prospects." (Source: Capital Reset, October 26, 2026)
Why the GHG Protocol backed down on hourly matching
Over the same period, the GHG Protocol announced it will postpone mandatory application of the strictest rules for Scope 2, the emissions category that covers electricity purchased by companies. The original proposal required companies to match clean energy credits to the exact hour and geographic location of consumption. The consultation the GHG Protocol ran in 2025 showed significant resistance: only 12% of companies supported hourly matching, and 71% signaled little or no support for the geographic deliverability requirement.
The two most frequently cited objections were the cost of compliance and the risk that stricter requirements would discourage companies from buying clean energy on the voluntary market, precisely where the decarbonization impact would be greatest.
The GHG Protocol's decision does not mean Scope 2 got easier. It means the deadline for the most demanding requirements was pushed back while the framework continues to be updated. The risk reading for the supplier base is the opposite of what it seems at first glance: companies that have already structured granular energy data by plant and by period do not need to recalibrate anything. Companies that put off data collection because they assumed the deadline would move are in the same position they were before, but without the push of a formal requirement nudging suppliers to structure the data alongside them.
The Brazilian law that puts traceability at the center of the energy transition
Law No. 15,506/2026, signed by President Lula on September 16 without vetoes, reorganizes how the Brazilian state will intervene in critical mineral supply chains for the energy transition, defense and technological competition. What is new, in what Valor Econômico described as a policy that "goes beyond access to the deposit," is that the text reaches financing, industrialization, innovation and, explicitly, traceability and control of strategic operations.
Brazil holds the world's largest niobium reserves, ranks among the largest lithium producers and holds a significant position in graphite, cobalt and rare earths. Owning the reserve is different from controlling the value chain that turns the mineral into a component for a battery, motor or solar panel, and that is exactly what the law acknowledges by making traceability a requirement of industrial policy.
In practice, this means companies operating in these supply chains will face a domestic regulatory traceability requirement covering the origin and processing of the mineral, which lines up with the requirements the European market is already building for batteries and critical components through value chain due diligence rules under the CS3D (Corporate Sustainability Due Diligence Directive, the EU's sustainability due diligence directive).
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What the three moves have in common
A quick reading might frame the three as contradictory signals: the ISSB expanding scope while the GHG Protocol retreats, and Brazil legislating in a direction the European market has not yet consolidated. A more accurate reading is different.
All three respond to the same pressure: the annual reporting model built on self-declaration does not produce comparable, verifiable data at the speed that financial markets, regulators and European buyers now need. What is at stake is not whether the requirement will exist, but how granular the data will be and who will have the authority to verify it.
The ISSB is building the verification structure for nature before making it mandatory, because the climate track record showed that the structure that becomes a standard is the one the market has already adopted as a voluntary reference. The GHG Protocol retreated on hourly matching not because granularity stopped mattering, but because the voluntary clean energy market, where smaller companies and companies from emerging economies have a larger share, could not absorb an immediate mandate without discouraging participation exactly where the decarbonization impact is greatest.
And the Brazilian critical minerals law uses traceability as an industrial policy instrument because a position in the global energy transition value chain depends on who can prove the origin and social responsibility of the material, not just on who extracts it.
Frequently asked questions
What is the ISSB practice statement on nature, and when does it take effect?
The ISSB (International Sustainability Standards Board), an arm of the IFRS Foundation, published in October 2026, at COP17 in Yerevan, a proposed application guide for IFRS S1 covering the disclosure of nature- and biodiversity-related risks. The public consultation is open until February 19, 2027. For now, adoption is voluntary, but the consultation itself asks whether the document should be given the status of a formal standard. Environmental organizations such as the Nature Positive Initiative are pushing for a dedicated standard on the topic.
Why did the GHG Protocol postpone the hourly matching rules for Scope 2?
The GHG Protocol (Greenhouse Gas Protocol), the leading global framework for greenhouse gas emissions reporting, proposed rules that would require companies to match clean energy credits to the exact hour and geographic location of consumption. The 2025 consultation showed that only 12% of companies supported hourly matching and that 87% pointed to the risk that the requirements would discourage corporate purchases of clean energy on the voluntary market. The GHG Protocol decided to delay mandatory application of the strictest rules, but the framework continues to be updated.
How does Law No. 15,506/2026 on critical minerals affect companies operating in these supply chains in Brazil?
Law No. 15,506/2026, signed on September 16, 2026 without vetoes, reorganizes Brazilian policy for critical mineral supply chains for the energy transition, including niobium, lithium, graphite and rare earths. The text goes beyond access to the deposit and reaches financing, industrialization, innovation and, explicitly, traceability and control of strategic operations. Companies operating in these supply chains will face a domestic regulatory traceability requirement covering the origin and processing of the mineral, which lines up with the requirements the European market is already building for batteries and components through the CS3D (Corporate Sustainability Due Diligence Directive, the EU's sustainability due diligence directive).
Talk to a supply chain traceability specialist.
