Dive Brief:
- A global initiative looking to develop metrics and guidance for companies to disclose and manage how business practices impact and are dependent on people, the Taskforce on Inequality and Social-related Financial Disclosures, released a draft framework last week to measure such impacts.
- The TISFD draft guidance’s recommendations are based around the idea that organizations disclose material and system-relevant risks around their business operations that impact people and describe their stakeholder engagement strategies, the scope of their disclosures and the time horizons used.
- Social-related metrics have been considered “less tangible” for years, and material social issues for companies vary across different industries and geographies. TISFD expects to release a final framework by late 2027, according to a timeline included in the draft.
Dive Insight:
TISFD launched in 2025 and was founded by 20 global organizations that include the California Public Employees’ Retirement System, the United Nations Development Programme, the International Labour Organization and the Principles for Responsible Investment.
The organization is similar in function and goals to the Taskforce on Climate-related Financial Disclosures and the Taskforce on Nature-related Financial Disclosures — disclosures developed by both groups have been or are being integrated into other reporting frameworks.
TISFD said that companies are relying on workers, consumers and communities. Strains on people have intensified while “inequalities reach new extremes,” according to TISFD. Those extreme inequalities are being recognized more often as systemic risks, while climate change and nature loss “compound pressures” and artificial intelligence risks “exacerbating inequalities.”
“Without better information, people-related considerations remain largely absent from strategic decision-making, until they materialize suddenly, catching businesses and investors unprepared,” TISFD said in the guidance. “In an era defined by uncertainty and deep structural change, this represents an increasingly untenable approach to governance and risk management.”
The framework asks businesses to disclose their governance of people-related impacts, as well as how their business strategies account for the impacts, risks and opportunities on people and any related financial effects. The guidance also asks businesses to disclose the processes they use to identify and manage people-related impacts and risk, as well as any metrics and targets used.
TISFD Co-chairs Peter Bakker, Sharan Burrow, Arunma Oteh and Gabriela Ramos said in the draft’s foreword that the beta guidance “marks an important milestone” for the global initiative, and that its necessity is “becoming increasingly clear and compelling.”
“Inequalities stand at modern day highs,” the co-chairs wrote. “One billion working people do not earn enough to afford a decent living, while the richest 10 percent have seen their share of global wealth increase. Meanwhile, businesses and investors are navigating a period of profound economic and social change. The rapid advance of AI and the climate transition present opportunities, but also the risk of widening gaps in access to secure work, income and economic participation.”
The standards are being designed to support harmonization with the International Sustainability Standards Board, Global Reporting Initiative and European Sustainability Reporting Standards and also aligns with taskforces on climate- and nature-related financial disclosures. TISFD said it is looking to “reduce fragmentation” to make reporting on people-related issues more comparable and create more integrated climate, nature and people-related disclosures.
TISFD is seeking feedback on the draft framework until July 31, followed by plans for additional drafts, pilot testing, technical collaboration and more feedback before the final version, according to a May 26 press release.
