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Sep 23, 2020

Business world now on ‘Walk-the-talk’

FA News Desk
Sustainable Development Impact Summit 2019, Schwab
Sustainable Development Impact Summit 2019, Schwab

The World Economic Forum today launched a set of metrics to measure stakeholder capitalism at the Sustainable Development Impact Summit.

Calling on all companies to adopt the metrics to demonstrate their progress against environmental, social and governance (ESG) indicators Klaus Schwab, Founder and Executive Chairman of the World Economic Forum said “With these metrics, the business world will finally be able to walk the talk on their commitment to ESG performance and the stakeholder capitalism principle.”

The initiative goes beyond the traditional remit of ESG and aligns its indicators with the SDGs by embracing metrics across four pillars: Principles of Governance, Planet, People and Prosperity.

The Forum’s International Business Council (IBC) sees this as not only good for society and the planet but also good for business. “It is proven that businesses that focus on all stakeholders and the planet over the long term do better,” said Punit Renjen, Global Chief Executive Officer of Deloitte at the livestreamed session today.

The project deliberately selected existing metrics from among the plethora of overlapping ESG standards and frameworks that currently exist – the “alphabet soup” of standards, as the session moderator Gillian Tett of the Financial Times put it.

“These metrics will allow stakeholders to understand a company’s long-term value”rather than the short-term view many current financial metrics show. “This is incredibly important for investors,” Di Sibio said.

According to Bill Thomas, Global Chairman and Chief Executive Officer of KPMG International, companies also have a more direct self-interest in adopting the metrics.

“One of the biggest reasons to do it is (for) attracting and retaining the very best people today,” he said and added, “They want to work for an organization that has a purpose beyond simply profits; they know that business has to play a role to build a better, more sustainable society.”

The Forum’s IBC sees this moment as an opportunity to take the lead in shaping the future development of non-financial reporting.

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