This commitment is sponsored by the International Business Council (IBC) of the World Economic Forum and will be proposed for signature by all participants in the Annual Meeting 2021.
The Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution, articulates the principles of stakeholder capitalism and reflects the ethos of the World Economic Forum since its founding in 1971. The manifesto states, “a company is more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives.”
The World Economic Forum is committed to delivering on the promise of stakeholder capitalism. In January 2017, the Forum and the IBC community sponsored the Compact for Responsive and Responsible Leadership. More than 140 corporate leaders across industries and sectors committed themselves to the conviction that society is best served by corporations that have aligned their goals to serve the long-term goals of society, and that the Sustainable Development Goals are the roadmap for that alignment.
After the issuance of the compact, the IBC, representing the World Economic Forum’s business community, launched an initiative to address the need for consistent and comparable ESG metrics and disclosures. Following a year’s effort from contributors on every continent, the ESG project team has identified a core set of relevant ESG metrics and recommended disclosures that could be reflected in the mainstream reports of companies (e.g. annual reports, sustainability reports, proxy statements etc.), on a consistent basis across industry sectors and countries. These Stakeholder Capitalism Metrics strengthen the ability of companies and investors to benchmark progress on sustainability matters, thereby improving decision making and enhancing transparency and accountability regarding the shared and sustainable value companies create.
The metrics and disclosures are drawn wherever possible from existing voluntary standards (such as the Global Reporting Initiative, Sustainability Accounting Standards Board, Task force on Climate-related Financial Disclosure etc.). By adopting and reporting on the metrics, the business community will continue to catalyze greater cooperation and alignment among existing standards and encourage progress towards a systemic solution such as generally accepted international accounting standards for environmental, social and governance considerations that are relevant to long-term value creation. The World Economic Forum is committed to collaborating with and supporting all the relevant stakeholders to make this vision a reality.
The Forum invites IBC members, all World Economic Forum members, and partners to declare their intention to act on this commitment to measure stakeholder capitalism.
As a responsive and responsible leader committed to the principles of stakeholder capitalism as the most effective means of creating long-term enterprise value and addressing the societal priorities enshrined in the Sustainable Development Goals, I, the undersigned, commit to action within the remit of my responsibilities, duties and influence to:
Thank you for the update on the initiative and for your leadership in advancing it to this point.
Like you, I am convinced that transparency – founded on ESG metrics and disclosures – is central to our shared goal of translating corporate purpose into action, taking account of the needs and interests of a wide range of stakeholders. So I am pleased to confirm my commitment to its principles.
Of course, much of the individual and collective work to realize the initiative’s promise still lies ahead.
As individual companies, we will now need to carefully consider how best to reflect its intent in our disclosures over time, identifying and reflecting the core metrics we consider to be most material, relevant and meaningful to external stakeholders who wish to better understand our company’s ESG performance.
And collectively, we will need to continue to come together to learn, share and collaborate in support of greater comparability and convergence over time in reporting practices. In particular, I believe that to properly reflect companies’ ESG performance, as well as principles of relevance, materiality, proportionality and data availability, the expanded metrics will need further evolution.
This may be especially important in the context of the energy transition, where I am convinced that ESG metrics should recognize, reward and incentivize transitioning companies in sectors such as energy, transport and industry, fairly reflecting their commitment and contribution to the transition.
We are keen to support this work and I would like the bp team to contribute fully to this collective endeavour.
We look forward to our continued work together.