In recent years, the financial sector has witnessed a growing emphasis on environmental, social, and governance (ESG) factors in investment decisions. While climate-related disclosures have gained significant traction, the announcement of the Taskforce on Inequality and Social-related Financial Disclosures (TISFD), at Climate Week 2024, is set to reshape the landscape of sustainable finance, only this time by focusing on inequality.

Mapping the rise of inequality and social-related financial disclosures
The genesis of TISFD
The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) emerged from the convergence of two parallel initiatives: the Taskforce on Inequality-related Financial Disclosures (TIFD) and the Taskforce on Social-related Financial Disclosures (TSFD). The TIFD initiative was launched in 2020 as a response to the glaring inequalities exposed and exacerbated by the COVID-19 pandemic. Concurrently, the TSFD was developing its own framework to address broader social issues in financial disclosures.
Inspired by the success of the Task Force on Climate-related Financial Disclosures (TCFD), both initiatives aimed to create systemic risk management frameworks that could address social and inequality-related issues created or impacted by the private sector. Recognising the overlap in their objectives and the potential for greater impact through collaboration, the two taskforces announced their merger in early 2024, forming the TISFD.
This consolidated effort is led by a diverse coalition of organisations, including the Predistribution Initiative, Rights CoLab, the Southern Centre for Inequality Studies, and the Argentine Network for International Cooperation (RACI), among others.
These organisations, along with a growing number of allies from the private sector, civil society, and academia, recognised the need for a standardised approach to measuring and managing both inequality-related and broader social risks and impacts in the financial sector.
By combining their expertise and resources, TISFD now aims to provide a more comprehensive and cohesive framework for businesses and investors to effectively identify, assess, and report on their socio-economic inequality impacts, dependencies, risks, and opportunities. This unified approach is expected to have a more substantial impact on the financial sector and accelerate the adoption of social and inequality-related disclosures.
Key objectives and features
TISFD’s primary goal is to provide guidance, thresholds, targets, and metrics for companies and investors to measure and manage their impacts on inequality, as well as inequality’s impacts on company and investor performance. This comprehensive framework will enable:
- Improved transparency on corporate actions that exacerbate inequality
- Better assessment of how socio-economic inequality presents risks to companies and investors
- Enhanced accountability of the private sector’s performance on inequality-related issues
A unique aspect of TISFD is its commitment to inclusive governance. The initiative aims to develop a structure that allows legitimate representatives of the most vulnerable individuals and communities to participate as co-creators on equal footing. This approach ensures that the framework remains relevant and accountable to its mission of reducing inequality.
The evolution of TISFD
Since its inception, TISFD has made significant progress in establishing its foundation and methodology. In 2022, the initiative launched a coalition of Allies across the private sector, civil society, and academia to commence the mapping and synthesising of metrics, targets, and guidance.
The project timeline includes ambitious goals:
- 2024: Publication of an Exposure Draft of the TISFD Framework for public consultation and revision
- 2025: Piloting of the Draft TISFD Framework
Implications for the financial sector
The introduction of TISFD (and subsequently TISFD) is set to have far-reaching implications for the financial industry:
- Enhanced risk management: By incorporating inequality-related factors into their risk assessments, financial institutions can better anticipate and mitigate potential threats to their investments and operations.
- Improved decision-making: Standardised disclosures will provide investors with more comprehensive information, enabling them to make more informed investment decisions that consider social impact.
- Regulatory alignment: As regulators increasingly focus on social factors in ESG reporting, TIFD/TISFD will help financial institutions stay ahead of potential regulatory requirements.
- Reputation management: Companies that proactively address inequality issues through transparent disclosures may enhance their reputation among stakeholders and consumers.
- Holistic sustainability approach: TIFD/TISFD will provide a social throughline across existing frameworks like TCFD and TNFD, offering a more comprehensive view of sustainability risks and opportunities.
Challenges and opportunities
While the potential benefits of TIFD/TISFD are significant, the initiative faces several challenges:
- Complexity of measurement: Quantifying inequality impacts and risks may prove more challenging than environmental factors, requiring sophisticated metrics and methodologies.
- Data availability: Obtaining reliable and consistent data on inequality-related issues across different geographies and sectors could be difficult.
- Stakeholder engagement: Ensuring meaningful participation from vulnerable communities in the framework’s development and implementation will be crucial but potentially challenging.
Despite these hurdles, TIFD/TISFD presents a unique opportunity for the financial sector to take a leading role in addressing one of the most pressing issues of our time. By embracing this framework, financial institutions can contribute to a more equitable and stable global economy while potentially uncovering new investment opportunities in underserved markets.
As the initiative progresses towards its launch and implementation, financial professionals should closely monitor its development and consider how to integrate inequality-related disclosures into their existing ESG frameworks. By doing so, they can position themselves at the forefront of sustainable finance and contribute to a more inclusive and resilient financial system.
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