Key Impact Points:

• New Reporting Guidance: The Impact Disclosure Taskforce, co-chaired by JPMorgan and Natixis, releases voluntary guidelines to help companies and sovereign entities measure and disclose progress on UN Sustainable Development Goals (SDGs).
• Focus on Impact: The guidance aims to attract impact-focused investors by increasing transparency on how entities contribute to reducing poverty and inequality.
• Call for Adoption: Investment banks, institutional investors, and regulators are encouraged to support and promote the new disclosure framework to increase financing for sustainable development.

The Impact Disclosure Taskforce, a market-led initiative co-chaired by J.P. Morgan and Natixis Corporate & Investment Banking, has released its final voluntary Impact Disclosure Guidance aimed at enhancing transparency on corporate and sovereign efforts to meet the UN Sustainable Development Goals (SDGs). This guidance follows a public consultation period and aims to help entities provide clear reporting on how their strategies address poverty, inequality, and access to basic human needs.

Drawing from existing resources, the final guidance outlines a five-step process for measuring and disclosing development impacts. The guidance is designed for both developed and developing country entities, enabling them to report on underserved communities at home and abroad while attracting impact-focused investors to fund these initiatives.

“Institutional investors that prioritize impact in their investment strategies are more varied and nuanced than traditional ESG investors. While some investors may seek impact on financial inclusion, others on water and sanitation, and others on gender equality; they all require better impact disclosure from entities issuing securities. This guidance will increase the investment opportunities across all themes, providing investors more choice to invest in accordance with their financial and non-financial criteria” said Gergana Thiel, Global Co-Head of Macro Sales at J.P. Morgan.

Key elements of the guidance include:

• Entity-level but context-specific: Assessing the overall strategy of the entity in specific countries, including how its products, services, and operations address the most critical development gaps.
• Impact-oriented: Focusing on outputs and outcomes, along with the theory of change that supports those outcomes.
• Forward-looking: Setting clear targets to measure intended impacts and providing regular updates on progress.

The Impact Disclosure Taskforce calls on investment banks and underwriters to promote the guidance to their corporate and sovereign clients. It also encourages institutional investors to review entities that adopt the framework for potential allocation from sustainable or impact portfolios.

“This guidance addresses a neglected global engagement issue and provides a practical framework for companies to report on positive impact,” said Dan Grandage, Chief Sustainability Officer, Investments, Abrdn. “Making this data accessible, consistent, and comparable has aided impact analysis and reporting… We hope it will support the growth of investments dedicated to contributing to the UN SDGs.”

The Taskforce, which includes more than 80 financial institutions and industry stakeholders, will continue to expand its network to support broader adoption of the guidelines. Efforts are now focused on building infrastructure to facilitate the dissemination and analysis of disclosed impact information.

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“The guidance is a new toolbox for framing a contribution to the UN SDGs in a readable way for financiers. It provides a step-by-step method and will nudge corporates and sovereign entities to set forward looking targets. It also paves the way for fruitful engagement on impact delivery and optimization, but also remediation as it includes negative effects.” said Cédric Merle Hamon and Leisa Cardoso De Souza from Natixis Corporate & Investment Banking’s Green and Sustainable Hub.

The Impact Disclosure Taskforce will remain a key resource for stakeholders looking to implement these guidelines and promote transparency in financial markets.

See final voluntary Impact Disclosure Guidance here.