100 companies to report on efforts to learn society
The World Economic Forum (WEF) has confirmed that more than 100 companies have supported their Stakeholder Capitalism Metrics initiative, which encourages companies to report consistently on their efforts to achieve societal goals beyond the pursuit of profit.
Companies that have committed to introducing the metrics since early 2021 include Enel, Ericsson, Hyundai Motor Group, Swiss Re and Standard Chartered. They join companies like Unilever, Siemens, Nestle, Dow, PayPal, Mastercard and Salesforce.
The metrics were first published in September 2020, after a year-long collaboration between WEF, Deloitte, EY, KPMG and PwC. There are 21 core metrics and an additional 34 advanced metrics and metrics on four topics: Governance, Planet, People, and Wealth.
Governance-related disclosures include reporting on materiality assessments; Composition of the board by gender; Support for underrepresented social groups; the other positions of directors; Risk; Code of ethics and anti-corruption measures. Companies are also required to disclose financial losses due to unethical behavior.
Under the “Planet” pillar, companies are encouraged to report their total emissions footprint in absolute terms; Climate risk along the value chain; Water footprint and water risk exposure; Land use, land conversion and impacts on biodiversity; Waste and resource related risks.
Meanwhile, the topics covered by the pillars of people and prosperity include diversity and inclusion; Wage level; same salary; Health and safety; Well-being of employees; taxes paid and research and development expenses.
So far, 50 companies have included the metrics in their reporting for 2020-2021, either through annual reports, sustainability reports, or integrated reports that combine elements of the two. An initial analysis of these reports by the WEF shows that the companies combined invested $ 1.5 trillion in training and approximately $ 23 trillion in multi-year innovation programs over a 12-month period.
“We are pleased that so many companies are joining this initiative and we are even more pleased that many are already integrating the key figures into their reporting,” said the managing director of the WEF, Olivier Schwab.
“This is the first time we have publicly seen this range of data from global companies across different sectors on ESG factors. The Stakeholder Capitalism Metrics already show that consistent and comparable ESG reporting can help articulate the collective contribution of ESG commitments to stakeholders. “
Future of the company
In the context of 2020 and 2021, dedicated business is a hot topic more than ever as consumers and investors want to support businesses that have helped communities through Covid-19
Last year, the University of Cambridge’s Institute for Sustainability Leadership (CISL) published a ten-point plan based on discussions with senior executives and sustainability experts to serve as a manifesto for targeted business.
Similarly, the CEOs of some of the world’s best-known companies, including L’Oreal, signed a letter setting out how the dedicated economy will grow after Covid-19. And as 2020 came to an end, the Vatican created a “Council for Inclusive Capitalism” made up of executives from big companies like Kering and Visa. This “Coalition of the Willing” was created to accelerate the private sector’s contribution to the Sustainable Development Goals (SDGs).
Building on this trend, the British Academy released the final report of its Future of the Corporation program this week, which tracks executive attitudes towards purpose-washing and explores potential ways to combat purpose-washing.
The report reveals the results of a survey of 511 senior decision-makers in the private sector, which found that two-thirds are taking action to make their organizations more focused. Additionally, 43% agree that businesses should exist to find and scale profitable solutions to the most pressing global environmental and social challenges – and that they shouldn’t be able to harm people or the planet.
The survey also asked respondents about a number of potential changes in laws and regulations. 62% of respondents said their organization would support at least one major change. The proposed changes were:
- Corporate purpose is at the heart of corporate law and the fiduciary responsibility of the directors who determine and implement the corporate purpose
- The publication of government guidance on how companies can incorporate their purpose in their legal form, such as in their articles of association
- Regulators are given new powers to hold directors and controlling owners accountable for their corporate purposes
- A new obligation will be added to the mandate of all regulators to enforce the principle that companies will not benefit if they fail to meet the minimum standards set by the regulator
The British Academy finally concludes that changes are required throughout the economic system to materialize the new model of capitalism it proposes, with action being taken by business leaders, regulators, accountants, financial institutions and policymakers.
Professor Colin Mayer, Academic Director of Science for the Future of the Group, said: “The 21st century economy should be about solving the problems of people and the planet through innovation, imagination and creativity. Profits should flow out of this. But all too often companies also benefit from creating problems. This report provides a clear way to make targeted business effective by putting directors in charge of achieving the purpose, a strategy that ensures clear accountability. “
Register for the next edie webinar: How B Corps is shaping the future of sustainable business
edie is hosting a free webinar on Thursday, October 7th at 2:00 p.m. BST that will explain how companies, including edie’s editor, Faversham House, are actively doing business for good through the B Corp movement.
This one-hour edie webinar, hosted in collaboration with the sustainability consultancy and edie’s B Corp partner, Seismic, brings together a selection of certified B Corps to discuss how the process worked, what role the internal sustainability and CSR teams have played, and benefits so far experienced.
Here is the agenda and registration.