Impact Disclosure Taskforce launched

A group of financial institutions and industry stakeholders has formed the Impact Disclosure Taskforce to establish voluntary guidance to measure and disclose efforts to achieve the SDGs.

The guidance will relate specifically to corporates and sovereigns which the Taskforce says can be in jurisdictions with the most significant development gaps and so often lack the disclosures necessary to access sustainable capital. The Taskforce has set out voluntary guidance to help entities set targets that specify their intentions for incremental contributions towards addressing their development challenges. The guidance will also help them monitor and report their progress against such targets.

The Taskforce also intends to explore mechanisms for disseminating and analyzing this entity-level impact information to promote transparency and accountability. Entities that apply the guidance would provide data required for investment decisions, thus making their entire balance sheets more attractive to sustainable financiers. While the guidance can be used by corporate entities and sovereigns of all jurisdictions, it is primarily designed for entities that operate in economies facing the largest SDG gaps and in jurisdictions without regulatory guidance for sustainability disclosures.

The Taskforce comprises major financial institutions and industry participants, including participants from Amundi, AXA Investment Managers, Bank of America, Blaylock Van, BlueMark, BlueOrchard, Caisse de dépôt et placement du Québec (CDPQ), Citi, Deutsche Bank, Goldman Sachs Asset Management, J.P. Morgan Corporate & Investment Bank, Morningstar Sustainalytics, Natixis Corporate & Investment Banking, Natixis Investment Managers, Pictet Asset Management, Societe Generale, and Standard Chartered.

The Taskforce also obtains input from public development banks including the Asian Development Bank (ADB), the French Agency for Development (AFD), and the United States International Development Finance Corporation (DFC), as well as from the Global Impact Investing Network (GIIN), members of the Global Investors for Sustainable Development Alliance (GISD), and Linklaters. The International Sustainability Standards Board (ISSB) and the International Capital Market Association (ICMA) are observers to the Taskforce.

The Taskforce aims to complete the guidance for public consultation in April 2024.

Arsalan Mahtafar, Co-Chair of the Impact Disclosure Taskforce and Head of J.P. Morgan’s Development Finance Institution, says, “Institutional investors with strategies to finance the SDGs face a dearth of investible assets in the developing world. A transparency mechanism on an entity’s anticipated and realized SDG impacts has the potential to unlock hundreds of billions of sustainable capital towards international development each year through mainstream financing channels.”

Cedric Merle, Co-Chair of the Impact Disclosure Taskforce and Head of the Center of Expertise and Innovation within Natixis Corporate & Investment Banking’s Green and Sustainable Hub, says “Incentives are necessary for emerging market entities to further disclose their SDG footprint, including the harm caused. Data gaps must be filled in emerging jurisdictions where there are no sustainability reporting requirements, but this can only be a starting point. “Newcomers” to sustainability also need guidance on how to set targets meaningful to their financiers.”