Can Nigerian Companies Prepare for IFRS Without Understanding Nature Risks?

On 13 October, the Taskforce on Nature-related Financial Disclosures (TNFD) incorporated newly launched state of nature metrics in a refresh of its guidance. The refresh is LEAP 2.0, the first upgrade of the LEAP assessment approach since version 1.0 appeared in September 2023.

The release sits alongside a separate Nigerian development. Companies are preparing to report under the IFRS Sustainability Disclosure Standards, and the two have no causal link. But they meet at a practical question: can a company produce credible, investor-grade sustainability disclosures if it does not understand how it depends on, and affects, the natural world?

What LEAP Is, and What Changed

The TNFD published its final recommendations for nature-related risk management and disclosure in September 2023. LEAP was released alongside them as an approach for identifying and assessing nature-related issues. It is voluntary guidance, not a standard.

LEAP moves an organisation through four phases. Locate is where the organisation’s interface with nature exists. Evaluate looks at dependencies and impacts. Assess examines the resulting risks and opportunities. Prepare covers public disclosures and other actions.

The new version adds or expands several areas. These include state of nature measurement across land, freshwater and ocean realms, invasive alien species measurement, nature-related risk assessment, opportunities identification, environmental crime, nature in transition planning, landscape and seascape approaches involving multiple stakeholders, and assessments of financial institutions’ portfolios. It is also designed to work with Science Based Targets Network guidance.

For non-specialists, the change that matters most is the move from describing nature to measuring it. Earlier assessments could stall at a qualitative statement that a site depends on water or soil. The state-of-nature additions push companies toward asking what condition those ecosystems are actually in. 

LEAP 2.0 was released ahead of the COP17 UN biodiversity conference, alongside updated science-based target-setting methods from the SBTN and new metrics from the Nature Positive Initiative. The TNFD has also said it will contribute to an ISO standard based on the LEAP 2.0 approach.

Where The ISSB Fits

The IFRS Foundation houses the International Sustainability Standards Board (ISSB), which develops the IFRS Sustainability Disclosure Standards. IFRS S1 sets general requirements for disclosing material sustainability-related financial information. IFRS S2 covers climate-related disclosures. Both were issued in June 2023.

Nature is not absent from this architecture. In April, the ISSB said its existing requirements already oblige companies to report all material sustainability-related risks and opportunities, including nature-related issues that could influence a company’s prospects. ISSB Chair Emmanuel Faber put it plainly: material nature-related disclosure is not optional, because IFRS S1 already requires it.

What is still developing is the “how”. The ISSB chose to advance nature-related requirements through an IFRS Practice Statement, a non-mandatory document, rather than a standalone nature standard. The Board has set a 120-day comment period for the exposure draft, and the ISSB has said it will draw on the LEAP approach in this work. 

Three distinctions matter here:

• Final and in force: IFRS S1 and S2, whose general materiality requirement can capture nature-related risks.
• Voluntary guidance: the TNFD recommendations and LEAP 2.0.
• Proposed: the ISSB’s nature Practice Statement. It would be a tool companies can choose to use, although a jurisdiction could decide to require it. ISSB Vice-Chair Sue Lloyd has said that using this form leaves the door open for a Standard in the future. 

No Nigerian regulator has mandated TNFD or LEAP, and nothing in the research suggests one has proposed to.

Nigeria’s Reporting Timeline, Briefly

Nigeria adopted the IFRS Sustainability Disclosure Standards in June 2023, the first African country to do so. Under the amended Financial Reporting Council roadmap, mandatory reporting for public interest entities begins on 1 January 2028, extending to SMEs from 1 January 2030. 

The SEC’s circular of 23 September asks public companies and significant public interest capital market operators for implementation plans by 15 October. Those plans must cover board oversight, a gap assessment against IFRS S1 and S2, a timetable, data systems, internal controls, training, the expected year of first reporting and key challenges. 

The relevant point for this story is the gap assessment. It will reveal how much of a company’s risk picture rests on nature and how little of it has been looked at.

IFRS Sustainability Reporting in Nigeria: What Corporate Boards Must Do Before the SEC Deadline

Why The Connection Matters

Many companies will approach IFRS S2 first. Its climate focus is concrete, with emissions, scenarios and targets. Nature is harder, it is local rather than global, it lacks a single carbon-style metric, and its data is patchy.

But materiality under IFRS S1 is not limited to climate. If a company’s operations depend on a river, a fishery, a forest or fertile soil, and that resource degrades, the financial consequences can be as real as a carbon price. A company that ignores this risks a thin or boilerplate S1 disclosure that does not hold up to investor or assurance scrutiny.

The Nigerian evidence for the exposure is strong, particularly in extractive settings. One peer-reviewed analysis of regulator incident data found that between 2016 and 2020, 322 oil spills occurred within 18 protected areas in the Niger Delta. The same study found threatened species living in swamp forest and mangrove ecosystems that were mainly affected by spills. Wider reviews describe harm to agriculture, especially fishing, from contaminated soil and groundwater. 

For a company operating there, these are not abstract externalities. They bear on operating licences, community relations, remediation liabilities, insurance and access to finance. Under the double-edged logic of nature-related assessment, they are also impacts the company causes, which LEAP asks it to evaluate alongside its dependencies.

The principle extends beyond oil. Illustratively, and without claiming that any named company has experienced it:

• Agribusiness: a food processor reliant on rain-fed supply is exposed if soil health or rainfall patterns shift.
• Consumer goods: a beverage or manufacturing firm in a water-stressed catchment faces both operational and reputational risk.
• Banks and insurers: lenders with agricultural, extractive or real-estate portfolios hold nature exposure through their clients. This is where LEAP 2.0’s expanded portfolio guidance is most relevant.

A Readiness Test, Not A Mandate

The honest answer to the headline question is that a company can submit a plan without engaging with nature. It is harder to produce a defensible disclosure that way. IFRS S1 requires companies to identify material sustainability-related risks and opportunities. A company that has never located its interface with nature cannot confidently say what is or is not material.

LEAP 2.0 does not obligate anyone. It does offer a structured way to do that groundwork, and the ISSB’s own direction suggests the vocabulary will converge with TNFD’s. Companies that begin with the Locate phase now, prioritising sensitive sites and key supply chains, will be better placed whatever form the final ISSB guidance takes and whatever Nigerian regulators decide.

Three practical steps stand out for boards and sustainability teams:

1. Fold nature into the gap assessment. Ask whether any material dependency or impact on water, land or ecosystems has been screened.
2. Start with location. Map operations and critical suppliers against ecologically sensitive or degraded areas.
3. Watch the ISSB consultation. The 120-day window is a chance for African preparers and regulators to shape what is proposed.

The deadline for filing plans arrives tomorrow. The question of whether those plans reflect the natural systems businesses rely on will outlast it.