We recently attended the launch event for the beta framework of the Taskforce on Inequality and Social-related Financial Disclosures (TISFD), organised by NFQ, an international initiative that marks a turning point in the integration of social factors – and, in particular, inequality – into financial and business decision-making.
The event brought together representatives from leading institutions and organisations such as BBVA, COFIDES, Cabify, ILUNION, ICAC and AERI (Spanish Association for Investor Relations), establishing a key forum for discussion on the role of social information in the markets.
What is TISFD and why is it important?
The TISFD was established with the aim of providing a framework that enables companies and financial institutions to identify, measure, manage and disclose their impacts, risks and opportunities relating to inequality and other social issues. Inspired by initiatives such as the TCFD and TNFD, it proposes a structure based on governance, strategy, risk management and metrics, but with a distinctive approach: incorporating a systemic view of the relationship between business, society and the economy.
This represents a significant shift, as it moves inequality from the realm of social externalities to the very heart of financial analysis. It is no longer simply a matter of measuring impact, but of understanding how these dynamics directly affect value creation and market stability.
From social externality to systemic risk
One of the key points discussed during the event was how inequality acts as a driver of systemic risks. It is not merely an ethical or reputational issue, but a factor that has a direct and quantifiable impact on the global economy and market stability.
Some figures shared during the session clearly illustrate this economic dimension of social risk:
- Financial losses linked to human rights impacts are estimated at 85 trillion dollars across a small group of companies (Heartland Initiative, Wespath and Schroders).
- Around 3.9% of global GDP is lost due to preventable causes linked to work-related injuries and illnesses (ILOSTAT).
- Around 68% of the population believe that the economy is structured to favour the wealthiest, reflecting a growing risk of a loss of confidence in the economic system.
These figures show that inequality is not an isolated phenomenon, but a factor that can lead to economic inefficiencies, social tensions and regulatory risks, with cumulative effects on the financial system.
At the same time, it was also emphasised that addressing these gaps not only reduces risks but also creates clear opportunities for value creation:
- Four out of five employers report improvements in the quality of work following the introduction of living wages (London Economics).
- Closing the gender gap could lead to a 9.2% increase in global GDP in OECD countries by 2060.
- Sectors such as renewable energy are showing progress, with women accounting for 40 per cent of the solar energy workforce – almost double the figure for the oil and gas sector (IEA).
In this context, the TISFD framework provides the structure needed to understand and manage these dynamics. In its beta version (0.1), the framework is structured around four key components:
- Conceptual foundations, which set out definitions and concepts to help understand the relationship between business, finance, people and inequality.
- Disclosure recommendations, aligned with standards such as the TCFD, TNFD and ISSB, based on governance, strategy, risk management and metrics.
- Metrics and targets, with specific indicators that enable the assessment and reporting of social performance.
- Implementation guide, which provides guidance to businesses and financial institutions on the practical application of the framework.
This approach enables a shift from a fragmented view of social impact to a structured, comparable and useful analysis for financial decision-making, facilitating the integration of inequality into risk and value analysis models.
A key opportunity for the impact economy
From the perspective of impact economics, which we promote at SpainNAB, the development of this framework represents a strategic opportunity. One of the major challenges facing the sector has been the measurement and comparability of social impact, and the TISFD can help bridge this gap by aligning the language of impact with that of the financial market.
This not only facilitates better capital allocation, but also strengthens the link between impact, risk and opportunity, demonstrating that tackling inequality can be both a lever for value creation and a mechanism for risk mitigation. As its adoption progresses, the TISFD can help to integrate social factors into the financial mainstream and accelerate the mobilisation of capital towards solutions that reduce inequality.
The framework is still in the beta phase and its implementation will present significant challenges, particularly in relation to data availability and the definition of standardised metrics. However, the consensus is clear: improving the quality and consistency of social data will be key to building more resilient, inclusive and sustainable markets. In this regard, initiatives such as the TISFD reinforce the idea that better measurement is essential for more effective transformation.
The framework is currently open for public consultation, with comments welcome until 31 July. This process will help to strengthen a standard designed to improve understanding of social impacts in markets, ahead of the publication of its final version next year.
