‍What’s happening? The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) has released the first draft of its financial disclosure framework, designed to help organisations assess and report impacts, dependencies, risks and opportunities linked to people. The framework covers human rights, inequality, labour rights, wellbeing and human and social capital, across workforces, value-chain workers, consumers, end-users and communities. It sets five general requirements – materiality, system-relevant information, stakeholder engagement, scope and time horizons. Public consultation remains open until 31 July 2026. Feedback is expected to shape future versions before the final framework launches in late 2027. (ESG Today)

‍

Why does this matter? The TISFD was launched in 2025 to expand on the success of the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD). The draft reflects increasing awareness that inequality and people-related factors can influence business performance, investment results and the resilience of economies and markets. It follows the structure of the TCFD and the TNFD and aims to align with the International Sustainability Standards Board (ISSB) Standards, Global Reporting Initiative (GRI) Standards and the European Sustainability Reporting Standards (ESRS). It is intended to be used alone or as an addition to existing standards to capture information gaps.

‍

Business case – The draft highlights that an estimated one billion-plus workers worldwide do not earn enough for a decent living, while the richest 10% hold approximately 74% of global wealth and 83% of countries face high income inequality. Climate change and nature loss exacerbate the issue by impacting livelihoods, health and access to natural resources with those most vulnerable bearing the brunt. AI and automation also present a risk of reduced job opportunities. A 2025 World Economic Forum survey of more than 11,000 executives across 121 economies ranked social and inequality-related issues among the top 10 global risks, yet many reported limited capacity to quantify or manage them.

‍

Requirements – The framework suggests that organisations should disclose material information on people-related dependencies, risks and opportunities, as well as system-relevant information on externalities that may affect the wider market or financial stability. They should also describe engagement with affected stakeholders, including through due diligence and explain the scope of their assessment and disclosures, how this was determined and any expansion plans. Organisations should also consider and define short-, medium- and long-term time horizons in their disclosure.

‍

Finding the way – The TISFD intends for its framework to help organisations to identify how people-related impacts and dependencies create business risks and opportunities, including system-level risks. Disclosures can show where business models face risk, where resilience can improve and where long-term value may emerge. In turn, this supports better decisions on workforce practices, sourcing, business design, capital allocation and policy engagement. It also strengthens credibility with investors, regulators and stakeholders, while helping financial institutions improve portfolio assessment, risk management, product design and accountability.

‍

Under the spotlight – The framework will also help financial institutions integrate people-related risks into investment, lending, insurance, stewardship and client reporting. For regulators, it improves visibility of systemic social risks, supports more comparable data and may reduce reporting fragmentation over time. For policymakers, it strengthens evidence for policy design and joined-up economic strategy. It also enhances accountability by showing how business activity affects workers, consumers and communities, while aligning social priorities with climate, nature and transition agendas.

‍

Where next? TISFD has identified several priority areas for further development, including key drivers of people-related impacts relevant to system-level risks, the pathways through which they affect economic and financial outcomes, assessment guidance for businesses and financial institutions, scenario analysis and metrics and targets. It will also undertake further work on materiality and the interconnections between people, nature and climate. The work will be developed with TISFD’s Knowledge Partners and informed by practical experience, academic research and stakeholder feedback. A second draft is expected later this year.