Building Resilience Through Sustainability Disclosure: IFC's Support for Nepal's Transition to ISSB-Aligned Climate Reporting

In the aftermath of devastating floods and amid growing climate-related challenges across Nepal, businesses, regulators, and financial institutions are placing greater emphasis on understanding, managing, and disclosing sustainability-related risks. Access to reliable information on climate and sustainability impacts is becoming increasingly important for business resilience, investment decisions, and long-term economic stability. To help build this foundation, IFC partnered with the Nepal Accounting Standards Board (ASB Nepal) and the Nepal Stock Exchange (NEPSE) to advance the adoption of internationally aligned sustainability disclosure standards and strengthen local capacity to implement them.

Through its Integrated ESG Project, IFC supported ASB Nepal in developing Nepal Sustainability Reporting Standards (NFRS S1 and NFRS S2), based on the International Sustainability Standards Board (ISSB) global baseline. These standards provide organizations with a common approach to identifying and disclosing sustainability-related and climate-related risks and opportunities that may affect their performance and future prospects.

A major milestone in this effort was a series of public consultations and information-sharing sessions held in Kathmandu on May 20 and June 10, 2026, and in Biratnagar on June 23, 2026. Organized jointly by IFC and ASB Nepal, the consultations brought together listed companies, regulators, financial institutions, auditors, business associations, and technical experts to review the draft standards, exchange experiences from other markets, and provide feedback to help shape Nepal's emerging sustainability reporting framework. The discussions also raised awareness of evolving disclosure expectations and strengthened collaboration among key stakeholders responsible for Nepal's sustainability reporting agenda.

Recognizing that standards alone are not enough, IFC complemented its regulatory support with a strong focus on capacity building. Three Sustainability and Climate Disclosure Training of Trainers (ToT) programs were delivered in Kathmandu, supported by virtual follow-up sessions. The trainings focused on the practical implementation of ISSB-aligned disclosures, covering governance, strategy, risk management, and metrics and targets, the four core pillars of sustainability-related financial reporting.

Participants engaged in hands-on exercises that translated complex reporting requirements into practical actions. These included climate scenario analysis, sustainability risk management approaches, and the preparation of reporting templates and disclosures. To further support implementation, IFC facilitated peer learning by bringing representatives from Bangladesh's central bank, as one of the first jurisdictions to adopt ISSB for financial institutions, to share lessons learned from the country's experience in developing and implementing these disclosure requirements. The programs were designed to develop a local pool of trainers and practitioners who can support companies as they begin their sustainability reporting journeys.

By June 2026, more than 270 stakeholders from over 90 organizations had participated in the consultations, trainings, and knowledge-sharing activities. Participants represented government agencies, regulators, financial institutions, businesses, auditors, chambers of commerce, universities, and training institutes, with more than 50 women participating. Together, these engagements helped build a growing community of sustainability reporting practitioners and champions across Nepal.

The project also responded directly to market demand for practical implementation tools. One recurring request from stakeholders was for a greenhouse gas (GHG) emissions calculator tailored to Nepal's economic sectors and reporting context. IFC supported the development and beta testing of the calculator and subsequently provided the tool to ASB Nepal to support future implementation efforts.

Today, the value of these investments is becoming increasingly evident. As organizations across Nepal seek to better understand and manage climate and sustainability-related risks, the expertise, institutional networks, and implementation capacity developed through the project are helping strengthen the country's readiness to respond to emerging challenges. What began as a technical assistance initiative has evolved into a broader effort to improve market resilience and support more informed decision-making across the private and public sectors.

The initiative demonstrates how strong partnerships, local ownership, and sustained technical engagement can help advance transformational regulatory reforms, even during periods of uncertainty. By laying the foundations for high-quality sustainability disclosures aligned with global standards, IFC is helping Nepal equip businesses, regulators, and investors with better information to navigate risks, seize opportunities, and contribute to a more resilient and sustainable future.