The S in ESG Finally Gets Serious: What TISFD Means for Business.

Published: 2024  |  Perspective updated: 2025

For years, the S in ESG has been the awkward middle child. Environmental metrics have frameworks — carbon accounting, science-based targets, TCFD disclosures. Governance has decades of corporate governance codes, board composition requirements, and executive pay reporting. But social? Social has mostly been a collection of qualitative statements, voluntary disclosures, and vague commitments to treating people well.

That is beginning to change. In September 2024, the Taskforce on Inequality and Social-related Financial Disclosures — TISFD — launched with the aim of developing a global framework for companies and financial institutions to report on their impacts, dependencies, risks, and opportunities related to people.

The model is deliberately analogous to TCFD for climate and TNFD for nature. The ambition is comparable: to shift social inequality from a qualitative concern to a quantifiable, material financial risk that appears in mainstream reporting.

What TISFD actually covers

The TISFD framework covers four groups of people: employees, workers in value chains, communities, and consumers. For each group, the framework asks businesses and financial institutions to report on how their decisions and operations affect people — intentionally and unintentionally, directly and through supply chains.

For employees, this includes pay and the distribution of wages, working conditions, learning and development, and inclusive and equitable practices. For value chain workers, it includes sourcing decisions and purchasing practices that affect pay and conditions. For communities, it includes physical footprints and impacts on land, housing, or access to water. For consumers, it includes the impact that products and services have on wellbeing — physical, mental, financial, and in terms of knowledge and skill development.

That last category is where financial services sits most directly. The TISFD has noted that tackling inequalities and improving social outcomes presents real opportunities for market actors — including bolstering consumer demand by empowering people. For financial services organisations, this means the impact of products and services on customers' financial security is not just a Consumer Duty question. Under TISFD, it becomes a disclosure question too.

Why this matters beyond compliance

The most interesting thing about TISFD is not what it will require in terms of reporting. It is what genuine engagement with its framework will surface inside organisations.

The exercise of mapping your impacts on people — on employees, on supply chain workers, on communities, on customers — tends to reveal things that were always true but not always visible. That a pricing structure disadvantages certain customer segments. That purchasing practices push cost onto suppliers in ways that affect workers. That community investment is concentrated in areas that are commercially convenient rather than where need is greatest.

TISFD describes extreme socio-economic inequality as a system-level risk that can destabilise markets and supply chains, ultimately threatening corporate profitability. This is a useful reframe. The case for taking social impact seriously is not only ethical. It is that businesses which generate negative social impacts — through poor employment practices, exploitative supply chains, products that harm rather than help customers — are building financial risk that is not currently visible in their accounts.

Making it visible is what TISFD is designed to do.

The social value measurement opportunity

I am genuinely excited about what TISFD might unlock in terms of social value measurement — not as a compliance burden but as a genuine management tool.

Organisations that have already invested in understanding their social impact — measuring the outcomes their products create for customers, tracking the financial health of their workforce, assessing the community effects of their operations — are ahead of where the framework will require everyone to be. Those that have not are facing a catch-up process that will be easier if it starts now.

TISFD has the support of more than 100 organisations including the World Benchmarking Alliance, Global Reporting Initiative, OECD, UNDP, and various United Nations agencies. That breadth of backing suggests this is not another voluntary initiative that will quietly fade. The expectation is that the TISFD framework will be embedded into ISSB reporting standards — which means it will follow the same trajectory toward mandatory adoption that climate disclosure has taken.

A beta version of the framework is expected in late 2025, with the first public version by the end of 2026. The timeline gives organisations a window to engage proactively rather than reactively.

For financial services specifically, TISFD represents an opportunity to make the case for something I have long believed: that designing products and services that genuinely serve customers — including those who are hardest to reach and most at risk of poor outcomes — is not just the right thing to do. It is quantifiably good for business. TISFD is building the framework to prove it.