Dive Brief:
- Representatives from JPMorgan, Bank of America, Goldman Sachs, Citibank and other financial institutions announced forming an industry task force Wednesday, which will look to increase accountability for corporations and governments on how they are progressing with the United Nations’ sustainable development goals.
- The Impact Disclosure Taskforce will release a voluntary impact disclosure framework, expected to be published in April 2024, to put existing non-financial disclosure standards into a useful format for the industry, according to a concept note.
- The group said its guidance will help corporations improve their disclosures to an adequate level needed to access the growing pools of capital available from those looking for environmental and social returns, in addition to financial returns, on investments.
Dive Insight:
The task force’s founding is premised on the funding gap necessary to accomplish the UNs’ 2030 agenda, and its 17 associated sustainable development goals. The UN recently estimated there’s a $4 trillion annual financing shortfall in emerging markets and developing economies, The task force noted that it is “acutely aware” of how off-track the globe currently is from those 2030 targets, and that achieving these SDGs will require “unprecedented levels of investment.”
Arsalan Mahtahfar, co-chair of the task force and head of J.P. Morgan’s development finance institution, said in the release that a transparency mechanism, like the one the group is working on, will help institutional investors close the gap in demand and could “unlock hundreds of billions of sustainable capital towards international development each year through mainstream financing channels.”
The task force’s concept note laid the framework for the eventual voluntary guidance and is based on existing resources to help corporate entities and sovereigns, in jurisdictions with the most significant development gaps, set targets that specify their intended contributions towards addressing the development challenges most relevant to their local context. The guidance, according to the group, will also help companies monitor and report their progress against such targets.
The group’s membership also includes representatives from Deutsche Bank, Morningstar Sustainalytics, Amundi, AXA Investment Managers, Blaylock Van, BlueMark, BlueOrchard, Caisse de dépôt et placement du Québec, Natixis Corporate & Investment Banking, Natixis Investment Managers, Pictet Asset Management, Societe Generale and Standard Chartered.
Public development banks also providing input to the taskforce include the Asian Development Bank, the French Agency for Development, the United States International Development Finance Corporation, the Global Impact Investing Network, members of the Global Investors for Sustainable Development Alliance and Linklaters.
The International Sustainability Standards Board — which released its own set of sustainability standards in July — and the International Capital Market Association will act as observers to the taskforce, according to the release.
Cédric Merle, the other co-chair and a program leader within Natixis’ sustainable banking hub, said that while closing data gaps will be a starting point, newcomers to sustainability need broader target-setting guidance.
“Incentives are necessary for emerging market entities to further disclose their SDG footprint, including the harm caused,” Merle said in the release. “Data gaps must be filled in emerging jurisdictions where there are no sustainability reporting requirements.”
The UN’s sustainable development goals set in 2015 include an agenda to eliminate poverty and hunger, reduce inequality, and responsible consumption and production. However, UN Secretary-General António Guterres warned in the latest progress report that without urgent action, “the 2030 Agenda could become an epitaph for a world that might have been.”
In order to help organizations meet these targets, Bloomberg announced Monday that it had created an enterprise tool to give investors the ability to map corporations’ activities to the SDGs.
