Bank of America, Citi and Standard Chartered are among a list of major financial institutions that have come together to form the new Impact Disclosure Taskforce. The Taskforce aims to help corporate entities and sovereigns measure and disclose their efforts to achieve the United Nations’ Sustainable Development Goals (SDGs).
Achieving the SDGs requires unprecedented levels of investment, particularly in emerging markets and developing economies, says the Taskforce in a Nov 28 statement. This financing gap is estimated by the UN Conference on Trade and Development to be over US$4 trillion ($5.35 trillion) per year.
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.
The volume of private investment seeking financial, environmental and social returns is estimated to grow from US$41 trillion in 2022 to US$50 trillion by 2025. 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, says the Taskforce.
Thus, it has set out voluntary guidance to help entities set clear targets, detailing their plans for incremental contributions to address development challenges that are most relevant to their local community. The guidance will also help them monitor and report their progress against such targets.
“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,” says the Taskforce.
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The Taskforce aims to complete the guidance for public consultation in April 2024. Its members include 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 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) and members of the Global Investors for Sustainable Development Alliance (GISD).
The International Sustainability Standards Board (ISSB) and the International Capital Market Association (ICMA) are observers to the Taskforce.
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Arsalan Mahtafar, co-chair of the 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 realised 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 Taskforce and head of the Center of Expertise and Innovation within Natixis's 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.”
