Impact Disclosure Taskforce Releases Impact Disclosure Guidance, Helping Scale Financing for the UN Sustainable Development Goals

The Impact Disclosure Taskforce today released its draft impact disclosure guidance, helping entities committed to addressing development needs and reducing global inequality to access growing pools of sustainable capital.

Established in April of 2023 and now a 60+ strong network of financial institutions, capital markets participants, and industry stakeholders, the Taskforce was formed to help corporate entities and sovereigns measure and disclose their efforts to reduce major gaps to achieving the United Nations Sustainable Development Goals (SDGs).

The release of the draft voluntary guidance today initiates a four-month public consultation period, from April 18, 2024 to September 1, 2024, during which the Taskforce welcomes feedback from industry participants and practitioners.

The voluntary guidance aims to assist corporate and sovereign entities, particularly those in emerging markets and developing economies (EMDE), to use the principles of impact measurement and monitoring to attract sustainable pools of capital. The guidance also envisions establishing mechanisms for disseminating and analyzing disclosed impact information to promote transparency and accountability. The creation of a Sustainable Development Impact Disclosure (SDID) could provide sustainable financiers with more information to assist financing decisions.

The guidance draws on existing resources and outlines a 5-step process for entities to measure and disclose the impacts of their business strategies or national development plans. The guidance reflects a view amongst financiers that the full balance sheet of entities that follow this process would be considered for their sustainable capital allocation. The guidance is characterized by being:

• Entity-level: assesses the entity's overall strategy in countries of focus, as opposed to project-level frameworks;
• Impact-oriented: focuses on outputs and outcomes, rather than a taxonomy of sustainable activities or eligible investments;
• Forward-looking: establishes targets that measure intended impacts, as opposed to reporting on current sustainability levels; and
• Context-specific: tailors document to account for development gaps in local jurisdictions.

J.P. Morgan and Natixis Corporate & Investment Banking, the Taskforce co-chairs, supported DP World, a leading global logistics and supply chain solutions provider, in creating the pilot SDID under the Impact Disclosure Guidance. This pilot SDID focuses on DP World's anticipated contributions to SDGs focused on health, education, equality and economic growth through emerging markets infrastructure. See DP World's full SDID created in accordance with the impact disclosure guidance here: www.dpworld.com/sustainability.

Marc-André Blanchard, Executive Vice-President and head of CDPQ Global, Global Head of Sustainability

"I am proud that CDPQ played an active role in developing this important guidance. Transparent corporate disclosure is a priority for long-term investors because it enables investment decisions based on uniform and comparable data - critical information that contributes to a sustainable future. I am also pleased that one of our partners, DP World, is the first company to release a pilot disclosure under the Impact Disclosure guidance."

Timothée Jaulin, Head of ESG Development and Advocacy, Amundi

"Mobilizing capital to support the UN Sustainable Development Goals requires meaningful, impact-oriented, enhanced disclosure standards. The Sustainable Development Impact Disclosure guidance will be especially relevant for issuers looking to tap capital markets for their financing needs. All capital market instruments, including equity, general purpose debt or sustainable debt instruments require high quality sustainability disclosure at issuer level."

Robert Simpson, Head of Emerging Markets Strategy & Solutions, Pictet Asset Management

"Enhanced disclosure on development impact could be transformative in catalysing the needed flow of funds for investment in emerging markets to support their aim in achieving their SDG targets."

Arsalan Mahtafar, Co-Chair of the Impact Disclosure Taskforce and Head of J.P. Morgan's Development Finance Institution

"This guidance will help connect sustainable investors with entities that are accountable to tackling the development challenges in their countries. By connecting like-minded people and empowering them with relevant data, we can make strides towards achieving our global goals."

Cédric Merle Hamon and Leisa Cardoso De Souza, Co-Chair of the Impact Disclosure Taskforce, from the Center of Expertise and Innovation within Natixis Corporate & Investment Banking's Green and Sustainable Hub

"We are thrilled about the launch of the consultation period and crave for thoughtful feedback. Our endeavor is to harness market signals to sustainability data, providing enhanced financial terms to SDG contributing entities, and creating meaningful investing opportunities."

Adama Mariko, Deputy Executive Director for Mobilisation, Partnerships and Communication at the French Development Agency (AFD) and Secretary General of the Finance in Common Initiative

"I am pleased to see the progress made by this taskforce since COP28, submitting today its work for public peer review. This is a commendable effort by the private sector, with the participation of public development banks, aimed at improving access to sustainable financing in emerging and developing countries through improved impact measurement and disclosure."

The Taskforce welcomes feedback on the draft guidance and invites you to provide such feedback by visiting www.orrick.com/IDTfeedback.