Global business leaders commit to stakeholder metrics – Pensions & Investments

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A coalition of global business leaders across industries are committing to measuring stakeholder capitalism and reporting those metrics to investors and others.

The 61 corporate executives, including members of the World Economic Forum, said Tuesday that they will use metrics and disclosures developed by the World Economic Forum’s International Business Council in September to measure long-term enterprise value for all stakeholders.

Based on existing voluntary standards, the 21 core metrics and 34 additional metrics will allow companies and investors to benchmark progress on sustainability matters, and should promote progress toward a globally accepted method of non-financial reporting on common ESG metrics, coalition members said.

The metrics include non-financial disclosure on four key pillars: people, planet, prosperity and principles of governance. Metrics include greenhouse gas emissions, pay equality and board diversity, among others.

The new stakeholder metrics make stakeholder capitalism “really mainstream,” said Klaus Schwab, founder and executive chairman of the World Economic Forum. “The public commitments from companies to report not only on financial matters but also their ESG impacts are an important step towards a global economy that works for progress, people and the planet,” Mr. Schwab said in a statement.

Bank of America Chairman and CEO Brian Moynihan, who chairs the IBC, said in the statement that companies have to deliver great returns and help drive progress on ESG priorities. “Common metrics will help all stakeholders measure the progress we are making and ensure that the resources capitalism can marshal — from companies, from investors, and others — are directed to where they can make the most difference,” he said.

Robert Moritz, chairman of the PricewaterhouseCoopers Network that collaborated on the metrics, said more companies are expected to commit to them, rather than waiting for a convergence of rules and regulations.

“They wanted to get started themselves. Momentum has definitely been building” and institutional investors are asking those questions, he said in an interview.

“It is basically the starting point of a marathon. The idea is to try to get at this basic framework and tell that story,” Mr. Moritz. said. “If companies do that well, they’ll be able do well.”

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