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    New Taskforce Addresses Social Challenges

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    Stockholm (NordSIP) – The Task Force on Climate Related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD), which were founded in 2015 and 2021 respectively, have now been joined by a new Task Force on Inequality and Social -Related Financial Disclosures (TISFD).

    The new initiative was formally launched on 27 September 2024 by a group of more than 20 founding partner organisations.  The diverse group  includes financial institutions, asset owners, corporations, NGOs, and supranational organisations such as the United Nations Development Programme (UNDP), The Organisation for Economic Co-operation and Development (OECD), PRI, CalPERS, Oxfam, Manulife, Generation Investment Management, and Schneider Electric.

    - Partner Message -

    The stated aim of the TISFD is to develop guidance for financial institutions and other businesses regarding the disclosure of impacts, dependencies, risks, and opportunities relating to people.  While some may question the need for another global task force, along with the potentially increased workload that it may bring, the founder organisations believe that there are pressing and financially material social challenges that must be addressed to maintain global socio-economic stability.  In a paper setting out the TISFD’s vision, scope, and approach, they cite the following examples or material risks affecting market actors:

    Eroding social cohesion and stability in society.  A 2021 Ipsos survey of 25 countries revealed a majority of respondents believing their society was broken and systemically skewed in favour of rich elites.

    Eroding trust in institutions and government.  A 2023 survey of OECD citizens showed that almost half had low or no trust in their respective governments.

    Lack of investment in human capital.  The TISFD believes global productivity and innovation are being hindered by the long-term underinvestment in the well-being of low-income households.

    Reduced economic dynamism.  This is the relates to increased income inequality, with the resulting lower demand dampening economic growth.

    Increased financial instability.  The TISFD points to evidence linking rising income inequality with financial sector vulnerability.

    The TISFD will work on addressing these socio-economic challenges by creating a new global disclosure framework, which will mirror the structure of the TCFD, TNFD, and International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards to ease implementation.  The task force will also provide guidance for businesses and financial institutions seeking to put in place the new disclosure processes, as well as a wider educational capacity aimed at all relevant stakeholders.

    The TISFD governance structure comprises a 30-member steering committee, co-chaired by former World Bank Treasurer Arunma Oteh, World Business Council for Sustainable Development (WBCSD) CEO Peter Bakker, Former International Trade Union Confederation General Secretary Sharan Burrow, and UNESCO Assistant Director-General for Social and Human Sciences Gabriela Ramos.  The task force secretariat is headed by Interim Executive Director Kate Tallant Meier, who has a background in strategic consulting on social issues.

    The TISFD will now begin the task of informing stakeholders and building their capacity to inform the drafting of the proposed disclosure framework, a beta version of which should be available for testing by late-2025.  The task force hopes to publish the first version of the framework by the end of 2026.

    Image courtesy of Andrew Khoroshavin on Pixabay
    - Partner Message -

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