A new global taskforce has been launched to highlight the financial risks posed by social issues to companies and financial institutions while tackling inequality.
The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) will develop a global framework to help firms produce transparent disclosures about impacts, risks, and opportunities related to social issues, including inequality.
Created at a time when greater emphasis is being placed on taking social and climate issues into consideration when making financial decisions, the group aims to put people at the heart of the transition to a fairer economy.
One such example being the former UK government launching its guide on social considerations in pension scheme investments earlier this year.
People-centric transition
“Access to high-quality information about the effects of inequality will allow market participants to understand and better manage social risks,” said Peter Bakker, TISFD co-chair and president of the World Business Council for Sustainable Development (WBCSD).
“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,” he added.
The TISFD has support of more than 100 organisations from across financial institutions, labour, civil society, and international organisations and aims to incentivise both business and financial practices that create fairer, stronger societies and economies, the group stated.
“Given the catalytic impact to society and to other challenges such as climate, the TISFD will ensure that tackling inequalities is a top priority for the public and private sectors alike,” said Arunma Oteh, TISFD co-chair and academic at the University of Oxford and former treasurer of the World Bank.
According to fellow co-chair Sharon Burrows, former General Secretary of the International Trade Union Confederation (ITUC), the ISFD 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,” said Burrows.
Fighting inequality
Looking ahead, the co-chairs will work with the taskforce’s steering committee to create a disclosure framework that is market-usable, aligned with international standards on business conduct, and integrated with reporting standards, the group said.
“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,” said Gabriela Ramos, TISFD co-chair and assistant director-general for social and human sciences at UNESCO.
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