The Taskforce on Inequality-related Financial Disclosures (TIFD) and the organisations preparing a Taskforce on Social-related Financial Disclosures (TSFD) are consolidating efforts into a single initiative.
Plans for TIFD were first announced in 2020 with the aim of providing guidance, thresholds, targets and metrics for companies and investors to measure and manage their impacts on inequality, as well as the impact of inequality on company and investor performance.
TIFD is led by an interim secretariat that includes the Argentine Network for International Cooperation (RACI), Predistribution Initiative (PDI), Rights CoLab, Southern Centre for Inequality Studies (SCIS), and United Nations Development Programme (UNDP).
The proposal to create the TSFD, on the other hand, was initiated by the Business for Inclusive Growth (B4IG) coalition together with its strategic partner, the OECD. Initial discussions took place in November 2021 during B4IG’s board meeting.
B4IG members include Amundi Asset Management, AXA, BNP Paribas, JPMorgan, Unilever and Microsoft.
According to a B4IG spokesperson, the objective of the TSFD project was to develop for social issues the equivalent of the global frameworks developed by the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD).
“This global framework would ensure consistency and comparability across social-related disclosure standards,” they said.
Returning to Thursday’s announcement, the shared vision for the consolidated taskforce’s mandate is to develop a global framework for financial disclosures with a scope that “provisionally encompasses social and inequality-related risks and opportunities affecting financial stability and long-term enterprise value creation”.
On the subject of a name for the merged taskforce, B4IG’s spokesperson told Responsible Investor: “We’re still in discussion about the goals, principles and the topics to be addressed in the consolidated initiative. Once we have advanced on these elements collectively, we will align on a name.”
Unsurprisingly, the framework will be designed to ensure interoperability with the frameworks of the TCFD and the TNFD.
The new taskforce will also leverage third-party research and collaborate with existing initiatives to build convergence and identify critical gaps.
In terms of structure, it will be constituted and operated in a manner “that enables a co-creation process in which those advocating for the people most impacted by inequality have an explicit role in building the framework alongside investors, companies, regulators, academics and other stakeholders”, according to TIFD’s statement.
An early priority will be to develop an inclusive governance structure that includes a balance of these stakeholder representatives.
Further information about the taskforce – including propositions regarding its governance, processes, and substantive work – will be shared for public consultation, expected in early Q3.
The creation of the consolidated taskforce is also supported by the World Business Council for Sustainable Development (WBCSD), the Council for Inclusive Capitalism (CIC) and Shift, as well as investor and labour-focused organisations that are “pursuing particular bodies of work that are aligned with the long-term vision for the taskforce”.
Responding to the news, Dan Neale, responsible investment social themes lead for the Church Commissioners for England – an ally of TIFD – told RI: “We welcome the announcement of this consolidation. We see social inequality as a systemic risk and an issue which needs greater recognition. There is a clear need for global reporting standards on social issues and a single Taskforce on Social-Inequality Related Financial Disclosures can help achieve this.”
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