Inspired by the successful uptake of the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures, a global coalition of diverse stakeholders has come together to launch a Taskforce on Inequality and Social-related Financial Disclosures (TISFD). Conceived as a disclosure and risk management framework, TISFD aims to reduce socio-economic inequality by improving transparency on corporate and investor negative impacts that exacerbate it, while at the same time illuminating how socio-economic inequality can present risks to companies and investors. 

When completed, the TISFD framework will contain recommendations that enable businesses and investors to effectively identify, assess, and report on their inequality and social-related risks, opportunities, and impacts within the four pillars that are now familiar to the market:  Strategy, Governance, Risk Management, and Metrics & Targets. Civil society organizations, regulators, and asset owners will be able to use the TISFD framework to evaluate the private sector’s performance and hold corporations to account. 

Developing the TISFD framework requires a deep understanding of market needs for information related to how inequality impacts people differently across geographies, sectors, gender, and other life circumstances. A unique feature of TISFD, therefore, is an inclusive governance structure where voices of the global South and affected stakeholders have a seat at the table.  As an attendee at one of the initiative’s early meetings stated, inclusive governance is not only an ethical consideration – it’s also a practical consideration. It means we have a better chance of getting the framework right the first time, and in this way the TISFD Working Group’s commitment to co-creation and inclusive governance is also arguably more expedient.  

“An inclusive governance structure is essential so that we avoid replicating inequality in the process of creating a tool to address it.”

The wide range of issues inherent in the phenomenon of socio-economic inequality requires a building block approach, where each block of the framework is developed and laid through a co-creation process among topic experts. TISFD will convene Working Groups of experts on particular thematic topics – such as living wages and CEO pay, working conditions and discrimination, corporate tax strategies and lobbying, just transition, biodiversity and resource use rights, land and housing rights, gender disparities, and North-South inequalities. The Working Groups will guide the Technical staff of the Secretariat to map existing metrics, fill gaps, identify thresholds and targets, and develop guidance around metrics & targets, strategy, governance, and risk management. The Working Group will then sign off on final documents that constitute a block of work for approval by the Taskforce Steering Committee.

The Taskforce also must consider how concepts developed for frameworks on climate and nature – such as “dependencies” or the four pillar framework itself – may need to be adjusted so that they make sense for the social and inequality space. The Taskforce will also aim to identify the pathways by which corporate impacts and risks translate into systems-level risks, and in turn systematic risks to the portfolios of diversified investors. Another distinctive feature of TISFD is its focus on how investors themselves in both the public and private markets impact inequality through investment structures and incentives. 

To accompany the global framework, the Taskforce will also produce: 1.) a body of evidence on the system-level risks that companies and investors are exposed to as a result of extreme inequalities, as well as on the ways in which market actors impact people and contribute to inequalities; creating a community of practice for existing and new research; 2.) guidance and recommendations concerning the implementation of the disclosure framework as well as the design of metrics and indicators, and the use of thresholds and targets; and 3) educational and capacity building resources for diverse stakeholders, including affected right holders, to understand how TISFD’s work and disclosures can be used. 

Timeline: Rights CoLab and the Predistribution Initiative Kick-start the Taskforce 

The effort began in May 2020 during the height of the COVID-19 pandemic when thought leaders, executives, policy makers and regulators, and the public at large openly acknowledged the undeniable reality of the moment: that the pandemic was worsening inequality and inequality was worsening the pandemic and that both phenomena were threatening the global economy. Seeing the opportunity, Rights CoLab and the Predistribution Initiative (PDI) co-wrote “It’s Time for a Task Force on Inequality-related Financial Disclosures” for Responsible Investor. The article contained a link to a makeshift website and sign up page for expressions of interest in building what we then referred to as a Taskforce on Inequality-related Financial Disclosures together, and in three days nearly 100 people signed up. Based on this interest, Rights CoLab and PDI began to convene small and large group online meetings that brought together leaders of field-building organizations at the vanguard of devising solutions to inequality together with responsible investor and business platforms. 

In July 2021, with a grant from the Tipping Point Fund for Impact Investing, the Argentine Network for International Cooperation (RACI) and the Southern Centre for Inequality Studies at University of Witwatersrand joined Rights CoLab and the Predistribution Initiative to form the TIFD Interim Secretariat. A year later, in September 2022, the United Nations Development Programme (UNDP) joined the Interim Secretariat. 

Working from the principle of inclusive co-creation, during the inaugural year the Interim Secretariat shepherded a process of international coalition-building. We convened more meetings with subject matter expert individuals and groups working on inequality across multiple topics, including tax justice; climate and environmental justice; food, housing, and education justice; indigenous peoples rights; racial and ethnic justice; gender justice; disability justice and more to discuss the scope of the Taskforce and the governance structure. 

TIFD merges with an initiative to launch a Taskforce on Social-related Financial Disclosures (TSFD)

In 2022, the TIFD Interim Secretariat began conversations with Business for Inclusive Growth (B4IG), which was then exploring the development of a Taskforce on Social-related Disclosure (TSFD) together with their strategic partner the Wellbeing Institute of the  Organisation for Economic Co-operation and Development (OECD). In 2023, B4IG, which later that year merged with the World Business Council on Sustainable Development, and the TIFD Interim Secretariat consolidated their efforts into a single initiative, now known as the Taskforce on Inequality and Social-related Financial Disclosure (TISFD). Together these organizations, joined by other organizations across business, investor, civil society, labor and intergovernmental organizations, formed a 25-member Working Group with a mandate to prepare for the launch of the Taskforce.

Under TISFD, the commitment to inclusive governance remained while the taskforce sharpened its focus on the pathways by which impacts on people manifest as systemic market risks. In 2024 the TISFD Working Group developed a draft governance plan and technical scope, and launched a two-month public consultation to receive feedback from a broad range of stakeholders. The Taskforce is set to officially launch in September 2024. 

For more information visit the TISFD website here.