Stakeholder Capitalism Metrics Initiative: over 120 companies implement the ESG reporting metrics

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

• For the private sector to drive progress towards the UN Sustainable Development Goals, a common reporting system is essential.
• Over 120 companies have co-designed the Stakeholder Capitalism Metrics – a set of data points that allows companies to consistently report non-financial disclosures.
• 121 companies are now reporting against the Stakeholder Capitalism Metrics, 48 of which have reported for two years in a row.

The impact of aligning ESG frameworks.

Global challenges amplified by the COVID-19 pandemic have made Environmental, Social and Governance (ESG) issues even more pressing for policymakers, boards and executives.

To promote alignment among existing ESG frameworks, the World Economic Forum, with Partners including Deloitte, EY, KPMG and PwC, has identified a set of universal metrics and disclosures – the Stakeholder Capitalism Metrics.

During the Sustainable Development Impact Meetings 2022 in September, the Forum announced that 121 companies have already included the Stakeholder Capitalism Metrics in their mainstream reporting materials, including annual reports and sustainability reports. This group of global companies includes 48 companies which have been using the metrics for two years in a row.

Drawn from established standards, the Stakeholder Capitalism Metrics promote alignment among existing ESG frameworks to create a set of data points that can be compared between companies, regardless of their industry or region. The metrics include non-financial disclosures centred around four pillars: people, planet, prosperity and principles of governance and include measurements around greenhouse gas emissions, pay equality and board diversity, among others.

Since January 2021, over 150 companies have shown their support for Stakeholder Capitalism Metrics. Firms which have adopted this approach include Accenture, Bank of America, Cargolux, DP World, Eni, Fidelity International, Fubon Financial Holding, HSBC Holdings, IBM, Mastercard, Nestlé, PayPal, Royal DSM, Salesforce, Schneider Electric, Siemens, Total, UBS, Unilever, Yara International and Zurich Insurance Group, among others.

Companies who are reporting on the Stakeholder Capitalism Metrics have shown how comprehensive ESG reporting is driving effective transformation on sustainability efforts. Building on earlier case studies from The Adecco Group, Bank of America, Gingko Bioworks and Wipro, the latest case studies feature:

Ecopetrol: Colombia’s state-owned energy company using the Forum’s metrics to hone in on ESG reporting topics that are most advanced and that will generate value

HEINEKEN: international brewer adopting the metrics to capture comparable data on both sustainability and prosperity

JLL: global property services firm leveraging the Forum’s metrics to agree water management plans and targets

Philips: global health technology company adopting the metrics to reinforce accurate reporting on the environmental and social impacts of its operations

SABIC: one of the world’s largest chemical companies reporting against the metrics to advance its work with other value chain leaders to build a new, diversified economy

Schneider Electric: multinational energy company using Forum’s metrics to establish a new approach to biodiversity

In parallel, the Forum has engaged with the Impact Management Project to bring together the major standard setters and frameworks. The Forum worked closely with the International Financial Reporting Standards Foundation (IFRS) as a contributing member of their Technical Readiness Working Group. Through these collaborations, the Forum contributed to the establishment of the International Sustainability Standards Board (ISSB) which was unveiled during the Climate Change Conference COP26. The establishment of the ISSB was welcomed by the Forum’s International Business Council which encouraged regulators and policy makers to incorporate the IFRS’s sustainability disclosure standards to create a global baseline requirement for companies to report on.

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What’s the challenge with ESG reporting?

Measuring the impact companies have on society and our planet is essential if practices are to be managed and improvements are to be made.

However, public and private stakeholders have struggled for many years to make clear progress amongst a number of competing standards, frameworks and initiatives.

Without generally accepted international accounting or reporting standards when it comes to ESG, many companies are working in silos and cannot effectively share best practices or key learnings.

For the private sector to drive progress towards achieving the UN Sustainable Development Goals, a common system of measurement is essential.

“To see over 120 companies report on their environmental, social and governance performance shows how the private sector is committed to articulating their ESG impact to stakeholders. As we move towards shaping globally consistent and comparable ESG reporting standards, the Stakeholder Capitalism Metrics serve as a key resource for companies to enhance their ESG reporting capabilities.”— Olivier Schwab, Managing Director, World Economic Forum.

Our approach.

At the World Economic Forum Annual Meeting 2020 in Davos, 120 of the world’s largest companies supported efforts to develop a core set of common metrics and disclosures on non-financial factors for their investors and other stakeholders.

In September 2020, following a six-month consultation process with over 200 companies, investors and interested parties, the project published a refined set of 21 core and 34 expanded metrics and disclosures in its report Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation.

Since the launch of the Stakeholder Capitalism Metrics, the Forum has been building a coalition of over 150 global companies that are willing to show their commitment to stakeholder capitalism and to reflect these metrics and disclosures in their mainstream reporting.

“The corporate reporting system today isn’t delivering what stakeholders want and need, which is why we’re strongly supportive of the efforts to drive greater consolidation of standards and reporting frameworks. The Forum’s Stakeholder Capitalism initiative is a valuable step in this direction, and we’re delighted to contribute to this effort.”— Bob Moritz, Global Chairman, PwC

“The Stakeholder Capitalism Metrics take a lot of the mystery out of ESG reporting. They’ve been pressure-tested by more than 150 companies, and they have the Big Four’s intellectual capital behind them.”— Lawrence Di Rita, President of Greater Washington DC and Head of Global Public Policy, Bank of America

Our aim is to bring stakeholders together to simplify and harmonize the various approaches to non-financial reporting.

The work is carried out through three interconnected communities:

• Business Leaders: Advancing the adoption of the Stakeholder Capital Metrics and offering a collective, private-sector voice to the convergence dialogue
• ESG Practitioners: Leading the ESG strategy for their organization and implementing the recommendations into the reporting materials of their companies
• ESG Ecosystem: Harmonizing the global dialogue among standards foundations, private standard setters, regulators and international organizations

How can you get involved?

If your organization shares the conviction that companies need useful tools for measuring and communicating sustainable value creation, you are invited to join this coalition of global businesses.

In committing to ESG reporting on the Stakeholder Capitalism Metrics you can play a transformative role within our community and lend your voice to this convergence effort.

Contact us to get involved.