What is the Task Force on Inequality and Social-related Financial Disclosures (TISFD)?

Those of you following along with developments in responsible investment may well have heard about the launch of a new task force, this time looking at inequality and social issues. The TISFD follows in the wake of the TCFD (Task Force on Climate-Related Financial Disclosures) and TNFD (Task Force on Nature-Related Financial Disclosures) and aims to identify what the key social and inequality-related disclosures made by companies should be, as well as to advocate for the uniform adoption of the recommended disclosure requirements by global standard setters.

The Task Force launched in September 2024, with a view to developing the framework, iterating and formally launching between then and September 2026.

Inequality & Social Issues in Responsible Investment

The TISFD seeks to support a rapidly developing field of responsible investment. Ultimately, it aims to ensure that companies provide investors with the correct data in order to make decisions and, crucially, that this data is provided in a consistent format from company to company and geography to geography.

Inequalities and social issues have material financial consequences for investors, both at a system wide level and at an entity level. The Predistribution Initiative, one of the organisations involved in the development of the TISFD, identifies the following impacts of social inequality:

1. Erosion of social cohesion & stability, leading to polarization.

2. Inhibition of development, resulting in the neglect of health, skills and broader wellbeing.

3. Reduction of economic growth, inhibiting demand for goods and competition.

4. Threats to overall financial stability. And,

5. Inhibition of progress towards a Just Transition.

Since the Covid-19 pandemic, there has been a marked increase in the number of investors engaging on social issues; the pandemic raised concerns about essential workers’ wellbeing, racial equity, health equity alongside ongoing concerns regarding the need for a Just Transition. However, unlike in the climate space, there has been no overarching framework developed for investors to utilise, meaning they’ve been struggling to reliably identify the data they need.

The context for TISFD

The TISFD was formed following the merger of the Task Force on Social-related Financial Disclosures and the Task Force on Inequality-related Financial Disclosures in August 2023. The formal launch in September will follow on from the successful development of the TCFD and the TNFD. Whilst the TCFD reporting requirements have now been incorporated into the ISSB, the ISSB has not mandated the disclosure of social-related information. It is in this context that the TISFD seeks to develop a framework that can be adopted by international standard setters, learning from the TCFD’s work in the process. Approximately twenty-five organisations are contributing to the development of the TISFD’s framework, including investors, NGOs, companies and communities.

The Task Force has been clear that the TISFD will not exist forever, and instead the aim is to work towards global, harmonised, standards.

The TISFD’s Objective:

“An economic and financial system in which companies and investors effectively address their inequality and social-related risks, opportunities and impacts, resulting in stronger, more equitable societies and economies.”

TISFD has four main priorities contributing towards achieving its objective.

1. To develop a global framework for inequality and social-related issues with recommended disclosures for both companies and investors, allowing them to communicate their impacts, dependencies, risks & opportunities.

2. Building a body of evidence on the system-level risks companies and investors are exposed to, as well as the ways market actors impact people and contribute to inequalities.

3. Providing guidance & recommendations on the implementation of the framework.

4. Developing educational and capacity building resource(s) that can be used by stakeholders (including rights-holders) to understand how TISFD and disclosures can be used.

From an investment perspective, it is the TISFD’s expectation that this will allow companies to understand how social & inequality issues impact their businesses and finances thereby supporting investors to identify both system-level and entity level risk and to integrate that understanding into their investment activities and asset allocation. It will also support investors themselves to start to think about how investment structures contribute to and exacerbate inequality.

Approach & Timeline

One of the key approaches for TISFD will be interoperability with TCFD and TNFD. Their goal is to map the TISFD to existing frameworks, thereby strengthening their collective value and reducing companies’ reporting burden. The expectation is that disclosures will be compatible with both impact and financial materiality, with the framework prioritising the disclosure recommendations that will most meaningfully allow users to respond to social & inequality-related risks, opportunities and impacts.

The TISFD launched and established a secretariat, steering committee and broader taskforce participation in September 2024. Between Sept 2024 and Sept 2025, the Task Force will work on building the disclosure framework and expect to open this up for consult, piloting and refining from September 2025. The expectation is that the finalised framework will launch in September 2026. Throughout 2025 and into 2026 the Task Force will publish guidance on the framework and implementation.

If you’d like to be kept up to date of TISFD, get in touch here.