Stockholm (NordSIP) – On May 21, 2025, the Taskforce on Inequality and Social-related Financial Disclosures (TISFD) announced the formation of four Regional Councils (covering the Americas, Asia-Pacific, Europe & UK, and Middle East & Africa). The purpose of the TISFD is to develop a framework for corporate disclosure about inequalities and social-related issues and the four councils were established to ensure that the task force’s deliverables and impact are globally relevant and tailored to different regions’ unique social, economic, and cultural contexts.
In the Europe & UK Council, Oshni Arachchi, Head of Active Ownership at Danske Bank Asset Management is one of only two sitting in the Nordic region out of a list of 27 experts handpicked across the continent. Her appointment to the TISFD is individual and independent to her role and responsibilities at Danske Bank. Arachchi’s professional experience from the intersection of sustainability and finance as well as her educational background — she holds a Masters from Lund University in International Human Rights Law, focusing on International Labour Rights Law and Responsible Business Conduct and she gained early career-experience at the UN Development Programme and the Danish Institute for Human Rights, followed by a decade of responsible investment-related positions at ISS, Folksam and now Danske Bank — uniquely qualify her for the challenging discussions ahead. NordSIP spoke to her about the issues at hand and sought her opinion about the value she expects this work will add to the financial industry and beyond.
Drawing on her own experience, Arachchi explains why she believes the corporate and finance world need a framework on inequality and social-related financial disclosures. “A global framework that is interoperable with existing frameworks and standards has yet to be developed and I do consider that there is a need for a common foundation that supports businesses in communicating how they are addressing their inequality and social-related dependencies, risks and opportunities,” she starts.
“I think there is something to be said for learning and building on the work that has preceded through the TCFD and TNFD. Moreover, to that point, there has been a strong focus on environmental topics to date and a significant body of work that has been developed that examines the implications of climate and nature related on the performance of issuers (for just cause). To that end, I consider that the work that the TISFD is doing to gather a similar body of evidence (for social related) in parallel with the development of a global framework will be welcomed and received well (given in part your question that you pose on the measurable benefits for businesses and investors alike),” Arachchi continues.
In the context of the current DEI and ESG-backlash, the TISFD’s work may be seen by detractors as yet another element in the general trend towards increased disclosures, and as a pure bureaucratic exercise, working against productivity and the ability for Europe to compete at the global level. Arachchi disagrees with the premise that financially-driven investors systematically benefit from increased inequalities and she argues that managing social issues well is a key to positive financial performance.
“First, I think that it is in investors’ interest that companies manage their risks (financial and sustainability-related alike) and the market does respond where there is an evaluation that businesses may be mismanaging these related risks and impacts, and thereby potentially risking litigation, regulatory action and compromising goodwill amongst stakeholders,” Arachchi explains. An illustration of this point can be found in the mining industry, she points out.
Disclosure requirements can be effective guardrails against corporate misbehaviours, but Arachchi suspects that they can also add to positive financial performance in certain cases. While the jury is still out, she hopes the work of the TISFD will contribute to providing the necessary evidence. “There is a widely held belief that the sound management of social related impacts and risks, as demonstrated through transparency and disclosures, can contribute to strong financial performance. And fundamentally through the collection of a body of evidence to support the adoption of a global framework, the TISFD is seeking to move from those anecdotal examples to data driven demonstrations,” she says.
For now, Arachchi does provide an example of a blue chip company who has recently benefitted from its social-related work. “Real examples do abound, with one such commonly cited being Unilever who is considered to have strong and credible human rights disclosures in place. These have contributed to the company being better positioned to address operational risks and also to inclusion in high profile sustainability indices, such as FTSE4Good, Dow Jones Sustainability Index, and MSCI ESG Leaders, which can contribute to increased investor interest and stronger valuations. I’m sure more examples exist, but for those I would refer readers to research tools to support them in identifying them,” she concludes.
