Draft Impact Disclosure Guidance: What Companies Should Know

Thousands of businesses will study the Draft Impact Disclosure Guidance, designed to help them to access and scale growing pools of sustainable capital

Global businesses are being asked for their feedback about the draft Impact Disclosure Guidance, which has been published by a taskforce of leaders, including from JPMorgan Chase.

The taskforce was established in April of 2023 and is now a 60+ strong network of financial institutions, capital markets participants and industry stakeholders.

It 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 taskforce said: “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.”

The draft voluntary guidance is out for consultation until September 1 2024.

What is it designed to achieve?

It 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 suggests establishing ways to share and analyse disclosed impact information to promote transparency and accountability.

A key part of the draft guidance is the creation of a Sustainable Development Impact Disclosure (SDID), which could provide sustainable financiers with more information to assist financing decisions.

The process

The guidance outlines a five-step process for organisations to measure and disclose the impacts of their business strategies or national development plans.

The guidance is characterised 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 collection of sustainable activities or eligible investments
  • Forward-looking: establishes targets that measure intended impacts, as opposed to reporting on current sustainability levels
  • Context-specific: tailors document to account for development gaps in local jurisdictions

Businesses and supply chain firm combine

JPMorgan Chase and Natixis Corporate & Investment Banking, the taskforce co-chairs, supported DP World, a leading global logistics and supply chain solutions provider, in creating a pilot SDID under the Impact Disclosure Guidance.

The pilot focuses on DP World’s anticipated contributions to SDGs in the areas of health, education, equality and economic growth through emerging markets infrastructure.

A widespread welcome

Members of the organisations involved said the guidance could be “critical” for the pursuit of sustainable financing.

Arsalan Mahtafar, Co-Chair of the Impact Disclosure Taskforce and Head of JPMorgan’s Development Finance Institution, said: “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.”

Marc-André Blanchard, Executive Vice-President and head of CDPQ Global, Global Head of Sustainability, said: “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.”

Timothée Jaulin, Head of ESG Development and Advocacy, Amundi, said: “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, said: “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.”

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, said they are “thrilled” about the launch.

And 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, added: “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.”

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