In Short : A new initiative called the Impact Disclosure Taskforce has been formed to focus on scaling up the financing of the United Nations Sustainable Development Goals (SDGs). The taskforce consists of major global asset managers, pension funds, banks, and insurance companies, all committed to accelerating the flow of capital towards sustainable investments.
In Detail :
- The Impact Disclosure Taskforce (the “Taskforce”) was established to promote transparency and accountability among corporates and sovereigns regarding their intentions and progress towards advancing the United Nations Sustainable Development Goals (SDGs)
- The guidance supports entities committed to addressing development needs and reducing global inequality to access growing pools of sustainable capital
- The Taskforce anticipates releasing the voluntary Impact Disclosure Guidance for public consultation in April 2024
NEW YORK : A network of financial institutions, capital markets participants, and industry stakeholders have formed the Impact Disclosure Taskforce to establish voluntary guidance to help corporate entities and sovereigns measure and disclose their efforts to reduce major gaps to achieving the SDGs. The Taskforce is acutely aware that the world is not on track to achieve the SDGs, the global agenda agreed in 2015 to alleviate poverty and inequality, provide for basic needs, protect the planet and combat climate change by 2030.1 Achieving the SDGs requires unprecedented levels of investment, particularly in emerging markets and developing economies (EMDE), estimated by the UN Conference on Trade and Development (UNCTAD) to be over USD $4 trillion per annum.
The volume of private investment seeking financial, environmental, and social returns is estimated to grow from USD $41 trillion in 2022 to USD $50 trillion by 2025.3 However, corporate entities and sovereigns in jurisdictions with the most significant development gaps often lack the disclosures necessary to access such sustainable pools of capital. The Taskforce has set out voluntary guidance that draws on existing resources to help entities set targets that specify their intentions for incremental contributions towards addressing the development challenges that are most relevant to their local context. 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 helpful 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.
A concept note outlining the objectives of the Impact Disclosure Taskforce can be found here. The Taskforce aims to complete the guidance for public consultation in April 2024.
Caroline Le Meaux, Global Head of ESG Research, Engagement and Voting, Amundi: “Mobilizing private investment toward impact-driven solutions has never been so dramatically needed to accelerate sustainable development in emerging markets and developing economies. The financial sector needs to accompany corporates and sovereigns facing the largest gaps towards achieving the SDGs, advising them on how they can set targets and report on them to be able to tap sustainable pools of capital. Amundi is proud to be part of the Impact Disclosure Taskforce, supporting the emergence of global standards for managing impact investments and going further in our commitment to promoting transparency and accountability.”
Maria Teresa Zappia, Chief Impact and Blended Finance Officer, Deputy CEO, BlueOrchard: “As impact investors, enhanced disclosure from issuers with material impact targets and metrics allows us to broaden our investible universe and further understand and report on the impact of our investments.”
Robert Simpson, Head of Emerging Markets Strategy & Solutions, Pictet Asset Management: “The asset management industry has a key role to play in closing the SDG financing gap and allocating capital to where it is most needed. With improved levels of disclosure, clarity on development priorities, and ongoing assessment, investors can allocate with greater confidence towards emerging markets and companies operating within them, investing beyond ESG labelled bonds.”
Arsalan Mahtafar, Co-Chair of the Impact Disclosure Taskforce and Head of J.P. Morgan’s Development Finance Institution: “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: “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.”
Thomas Eveson, Vice President, Global Lead for Sustainable Finance, Sustainalytics: “Closing the SDG gap requires innovative initiatives. Collaborating to provide suggested guidance on standardized impact metrics for development finance will allow entities to more clearly communicate their contribution towards the SDGs. We are working to support greater impact disclosures and ultimately attract more sustainable finance capital to emerging markets and developing countries.”