A new global Taskforce has been established to highlight the financial risks that global inequality poses to companies and financial institutions.
The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) aims to create a framework for companies and financial institutions to enhance their public reports with better disclosures regarding the impacts, dependencies, risks, and opportunities associated with social issues, particularly inequality.
The UNDP is a founding partner of the TISFD, a pioneering initiative to tackle inequality and social risks in financial reporting. By promoting transparency and accountability, the TISFD framework aims to significantly reduce social inequalities and create a more inclusive economy.
Supported by over 100 organisations from business, finance, labor, civil society, and international bodies, the Taskforce will be led by notable figures: Peter Bakker, Sharan Burrow, Arunma Oteh, and Gabriela Ramos. The Co-Chairs will guide the Steering Committee in promoting business and financial practices that foster fairer and more robust societies and economies.
“Access to high-quality information about the effects of inequality will allow market participants to understand and better manage social risks. In the last decade, we have seen how high-quality disclosures can make climate change an important part of financial decision-making. We need to do the same for inequality and the social issues at its root cause,” said Peter Bakker, President of the World Business Council for Sustainable Development (WBCSD).
Arunma Oteh, academic at the University of Oxford and former Treasurer of the World Bank added, “Given the catalytic impact to society and other challenges such as climate, the TISFD will ensure that tackling inequalities is a top priority for the public and private sectors alike. It will not only bring to bear the power of global financial systems and collective action to establish universally accepted disclosure standards that champion transparency, but also redefine reporting in ways that ensure that social and inequality risks are adequately accounted for.”
Gabriela Ramos, Assistant Director-General for Social and Human Sciences at UNESCO remarked, “Deep inequalities of income and opportunities in many countries around the world are preventing our societies to come together and address effectively other major challenges such as the climate, digital and demographic transitions. The Taskforce needs to elevate social and inequality disclosures as they also impact climate and nature-related risks. Together, this information will help ensure that every financial decision takes both people and the planet into account.”
Sharan Burrow, former General Secretary of the International Trade Union Confederation (ITUC) observed, “The TISFD has the potential to catalyse the shift to a fairer economy by enabling market participants to meaningfully report how they address impacts and risks to the human rights of workers, communities and consumers. Through the TISFD, we can help put people at the centre of the much-needed transition to a just and green economy.”
Looking forward, the Co-Chairs will collaborate with the Taskforce’s Steering Committee to develop an inclusive disclosure framework. This framework will be practical for the market, aligned with international business conduct standards, and integrated with reporting requirements. The TISFD aims to foster coordinated and impactful actions among market participants to address social challenges like inequality, while also capitalizing on the significant opportunities that arise from creating fairer, stronger economies and societies.