Introducing the TISFD: Reporting on Inequality and Social Risks

The Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015, by the Financial Stability Board (FSB), an international body making financial recommendations. This framework aims to help companies and financial institutions identify and disclose climate-related risks and opportunities, fully integrating them into corporate strategy and decision-making.

With the decline of natural resources and biodiversity, it is no surprise that in 2021 the Task Force on Nature-related Financial Disclosures (TNFD) was launched. This shift marks a key turning point in nature quantification, enabling companies to act and move towards nature-positive outcomes.

The success and accessible methods of these frameworks soon led to the creation of a third key pillar of sustainability reporting: the TISFD, or Task Force on Inequality and Social-related Financial Disclosures. This multi-stakeholder initiative, launched in 2024, aims to develop recommendations and guidance for businesses to understand and report on their impacts, dependencies, risk and opportunities related to people. 

This initiative highlights the urgent need to address social inequalities, as today, the richest 10% of the global population earn more than half of the world’s income and hold three quarters of the world’s wealth. Tackling social issues requires harmonized reporting and greater comparability.

Why is there a need for TISFD?

Global goals for advancing human development, including gender equality, are off track, with hundreds of millions of people still unable to meet basic needs, income and wealth inequalities at historic highs within many countries, and deep gaps persisting between low- and high-income nations — leaving many far from truly thriving.

Businesses both influence and are influenced by these social inequalities. Without robust tools to identify, assess, and disclose their social impacts and risks, many remain unaware of how their operations may perpetuate or help address disparities. The TISFD aims to close this critical gap by providing a coherent and actionable framework for social and inequality-related reporting.

The Taskforce’s approach

TISFD will cover multiple forms of inequality – horizontal (between social groups), vertical (between the wealthiest and poorest), location-based, as well as structural gaps in both opportunity access and resulting outcomes. The framework will reflect a double materiality approach: capturing financial materiality (risks and opportunities relevant to investors) and impact materiality (significant effects on people and society at large).

TISFD will also examine inequality as a system-level risk, highlighting how businesses contribute to and are affected by social disparities, which can have long-term financial and societal consequences.

Direct and indirect impacts on people

The Taskforce identifies a wide range of impacts on people, such as:

• Employees – through wages, working conditions, access to benefits, training opportunities, and inclusive workplace practices.
• Workers in value chains – influenced by sourcing and purchasing decisions that affect pay and labor conditions.
• Communities – impacted by operations that affect land use, housing, access to water, and other local resources.
• Consumers – affected by the quality and accessibility of products and services, which influence well-being, health, financial security, and skill development.
• Public institutions – shaped by corporate tax practices, lobbying, and advocacy that can strengthen or weaken public trust and governance.
• Economies – influenced by corporate behaviors such as anti-competitive practices or investment strategies that affect market fairness and resilience.

Financial institutions, in particular, have a distinct influence through decisions on capital allocation and engagement with investees, which can shape business behavior and outcomes for people.

Where does TISFD stand today? And what comes next?

As of mid-2025, the TISFD has concluded its preparatory phase. More than 1,000 stakeholders including companies, financial institutions, civil society organizations, labour representatives, and academic experts, contributed through surveys and consultations to help shape the initiative’s scope, governance, and strategic direction. A formal governance structure is now established, supported by a diverse and high-level multi-stakeholder leadership.

Building on this foundation, the Taskforce has defined five core deliverables:

1. A global disclosure framework aligned with TCFD/TNFD structures and IFRS standards, tailored to the specificities of inequality and social-related IDROs (Impacts, Dependencies, Risks and Opportunities).
2. Conceptual foundations that explain how business and finance influence outcomes for people, drawing on key concepts like human rights, well-being, and social capital.
3. A body of evidence demonstrating how social issues and inequalities generate financial and system-level risks for companies and markets.
4. Guidance and recommendations to support organizations in identifying, assessing, and reporting on social-related IDROs, including the use of indicators, metrics and thresholds.
5. Educational and capacity-building resources designed for diverse stakeholders from businesses and investors to civil society and affected communities, to support use and understanding of the framework.

The TISFD will release a beta version of its framework by late 2025, followed by a consultation period and a final version expected at the end of 2026. The initiative aims for alignment with existing standards (ISSB, GRI, ESRS) and supports interoperability across climate (TCFD), nature (TNFD) and social domains.

In the long run, the TISFD seeks widespread adoption and potential regulatory uptake to foster consistent, comparable, and decision-useful reporting on social and inequality-related matters participating in a transition to more inclusive and resilient economies.