The World Economic Forum today released a set of universal environmental, social and governance (ESG) metrics and disclosures to measure stakeholder capitalism that companies can report on regardless of their industry or region. Organized around the pillars of principles of governance, planet, people and prosperity, the identified metrics and disclosures align existing standards, enabling companies to collectively report non-financial disclosures.
Announced at the fourth annual Sustainable Development Impact Summit, this open and multi-stakeholder initiative delivers on a commitment from the World Economic Forum Annual Meeting 2020 in January. Since then, 120 members of the Forum’s International Business Council have shown strong support for ESG metrics, with some companies expected to begin incorporating them into their reporting immediately.
The report, “Measuring Stakeholder Capitalism: Toward Common Metrics and Consistent Reporting of Sustainable Value Creation”, comes at a pivotal moment. The social unrest, economic inequalities and racial injustice exacerbated by the COVID-19 pandemic has accelerated demand from business, governments, standards bodies and NGOs for a comprehensive, globally accepted corporate reporting system.
“This is a unique moment in history to walk the talk and to make stakeholder capitalism measurable,” says Klaus Schwab, Founder and Executive Chairman, World Economic Forum. “Having companies accepting, not only to measure but also to report on, their environmental and social responsibility will represent a sea change in economic history.”
The stakeholder capitalism metrics and disclosures, developed in collaboration with Deloitte, EY, KPMG and PwC, reflect an open consultation process with corporates, investors, standard-setters, NGOs and international organizations, and are designed to provide a common set of existing disclosures that lead towards a coherent and comprehensive global corporate reporting system.
In parallel to this work, the World Economic Forum has also collaborated with the Impact Management Project to bring together the efforts of the five leading independent global framework and standard-setters (CDP, CDSB, GRI, IIRC and SASB) to work towards a comprehensive corporate reporting system and a statement of intent which works as a complement to the common metrics released today.
Companies see the importance of social, climate and other non-financial factors as critical for their long-term viability and success. Some 86% of executives surveyed by the Forum agreed that reporting on a set of universal ESG disclosures is important and would be useful for financial markets and the economy.
“Companies have to deliver great returns for shareholders and address important societal priorities,” said Brian Moynihan, Chairman and CEO of Bank of America, and Chairman of the International Business Council. “These metrics will provide clarity to investors and other stakeholders and ensure capital is aligning to drive progress on the SDGs. That’s stakeholder capitalism in action.”
“As the UK works in partnership with Italy towards hosting the COP26 climate change conference in Glasgow in November 2021, I welcome the work of the World Economic Forum’s International Business Council in creating a set of common metrics for reporting sustainable value creation,” said Mark Carney, Finance Advisor to the UK Prime Minister for COP26 and United Nations (UN) Special Envoy for Climate Action and Finance. “Through this work you are demonstrating to shareholders, stakeholders and society at large that the private sector is committed to measuring and improving its impacts on the environment as part of the transition to a low carbon future. I encourage governments, regulators, the official accounting community and voluntary standard setters to work with the IBC towards creating a globally accepted system of sustainability reporting based on this project’s groundbreaking work.”
“The disruptions of 2020 have underscored the critical importance of organizations managing and reporting their impact on the economy, the environment and society, and their increasing connection to long-term enterprise value creation,” said Punit Renjen, CEO, Deloitte Global. “Deloitte is pleased to have led the development of the Principles of Governance pillar and collaborated on this project with so many respected organizations. We hope our work supports organizations as they move towards consistent reporting of ESG metrics and disclosures in mainstream annual reports, as ultimately, this is how the business community will make greater progress against the Sustainable Development Goals.”
“The time is now for companies to broaden their engagement with stakeholders,” said Carmine Di Sibio, EY Global Chairman and CEO. “The combined impacts of climate change, COVID-19 and economic inequality contribute to the urgency for businesses to embrace long-term, sustainable value creation and prioritize the needs of people and planet and the creation of broad-based economic prosperity.”
“As businesses become more acutely aware of their role in addressing societal and environmental issues, moving toward a common set of ESG-focused metrics will help ensure that we all collectively make a difference where it counts,” said Bill Thomas, Global Chairman and Chief Executive Officer, KPMG International. “Reporting on ESG factors like carbon emissions and human rights and other key metrics will not only help inform investors while helping companies control their full corporate value, it has the power to realign capitalism for the benefit of broader society.”
“Robust non-financial reporting is a crucial element of the systemic economic reform the world needs to address issues like climate change and social inclusion, and we were pleased to be able to collaborate on this initiative and lead on the Planet pillar of this work,” said Bob Moritz, Global Chairman, PwC. “Stakeholders – including investors, but also policy makers, consumers and employees – need more rounded, comparable and robust information to make decisions. Get that information flowing, align market incentives against performance on these metrics, and a better tomorrow becomes possible.”
Companies are encouraged to report on the full set of metrics in their mainstream reporting. “Measuring Stakeholder Capitalism: Toward Common Metrics and Consistent Reporting of Sustainable Value Creation” recommends a “disclose or explain” approach when certain metrics are not feasible, not relevant, or difficult to implement immediately. The report also recommends that each company apply its own view of dynamic materiality, reporting on what is deemed material to its business and stakeholders. The metrics are centred on four pillars:
- Reflects a company’s equity and its treatment of employees. Metrics include diversity reporting, wage gaps, and health and safety.
- Reflects a company’s dependencies and impacts on the natural environment. Metrics in this pillar include greenhouse gas emissions, land protection and water use.
- Reflects how a company affects the financial well-being of its community. Metrics include employment and wealth generation, taxes paid and research and development expenses.
Principles of Governance
- Reflects a company’s purpose, strategy and accountability. This pillar includes criteria measuring risk and ethical behaviour.
Health experts arrive in Wuhan to investigate COVID-19 origins
Members of an international team studying the origins of the virus that causes COVID-19 arrived in Wuhan, China, on Thursday, the head of the World Health Organization (WHO) announced during an expert meeting on the disease.
Tedros Adhanom Ghebreyesus, the WHO Director-General, was addressing the latest session of the Emergency Committee on COVID-19 established under the International Health Regulations (IHR), a treaty that guides global response to public health risks.
The new coronavirus that sparked the pandemic first emerged in Wuhan in December 2019. Tedros reported that most of the 15 members of the delayed mission are now in the city, although two people are still in Singapore awaiting COVID-19 test results.
“All members of the team had multiple negative PCR and antibody tests in their homes countries prior to traveling”, he said.
“The team members who have arrived in Wuhan will be in quarantine for the next two weeks, and will begin working remotely with counterparts in China. They will then continue their work on the ground for a further two weeks.”
Focus now on vaccine equity, travel prospects
Thursday marked the sixth meeting of the IHR Emergency Committee on COVID-19.
Members first convened a year ago, when there were less than 560 cases of the new disease. Today, more than 90 million cases have been reported globally, and the death toll has almost reached two million.
Tedros said although the rollout of COVID-19 vaccines represents “hope of light at the end of the tunnel”, focus is now on ensuring all countries can access them on an equitable basis.
He also highlighted two urgent issues for the committee’s attention: the recent emergence of multiple new variants of the virus, and the potential use of vaccination and testing certificates for international travel.
“One theme ties both issues together: solidarity”, said Tedros. “We cannot afford to prioritize or punish certain groups or countries. We are all in this together, and we must all come out of it together.”
Challenges in Africa
Meanwhile, the UN agency has warned of the need to avert a “runaway surge” of infections in Africa, as cases there top three million and new variants of the virus emerge on the continent.
COVID-19 cases have risen steadily since mid-September, with a steeper rise from late November, and could increase in the wake of the Christmas and New Year holidays due to travel and festive gatherings.
Dr. Matshidiso Moeti, WHO Regional Director for Africa, said although virus mutations are not surprising, preliminary analysis reveals that a new variant circulating widely in South Africa, known as 501Y.V2, is more transmissible.
“Even if the new variant is not more virulent, a virus that can spread more easily will put further strain on hospitals and health workers who are in many cases already overstretched”, she said.
“This is a stark reminder that the virus is relentless, that it still presents a manifest threat, and that our war is far from won.”
WHO is supporting African countries with reinforcing genome sequencing efforts, key to finding and understanding new COVID-19 variants.
So far, 501Y.V2 has been identified in Botswana, the Gambia and Zambia, while Nigeria is further investigating another variant found in samples collected in August and November. The virus variant circulating in the United Kingdom has not been reported on the continent.
World Bank Group and CES Announce Global Tech Challenge Winners
World Bank Group and CES announced the winners of the Global Tech Challenge at CES®2021.
The result of a partnership between the Consumer Technology Association (CTA) and the World Bank Group, the Global Tech Challenge was launched at CES 2020 to reward scalable and innovative technological solutions in three main areas: digital health in East Africa, resilience in India and gender equality around the world. Technology solutions that helped communities respond to the COVID-19 pandemic were also prioritized.
Selected among over 1,000 applications, three winners were selected for gender equality, 10 for resilience and 17 for digital health. More details about the selected innovations can be accessed here for health, resilience and gender equality.
Global Tech Challenge winners will have the opportunity to access financial and/or technical assistance to pilot and scale their solutions on the ground with private sector companies, governments and within development projects financed by the World Bank Group, one of the largest sources of funding and knowledge for developing countries.
“From closing the digital divide to building resilience in the face of natural disasters or pandemics, innovation can solve some of the most pressing development challenges. The World Bank Group is pleased to support impactful programs focused on bringing equal access to connectivity to women in developing countries and to recognize cutting-edge solutions such as AI-enabled robots to rebuild homes in post-disaster areas. Now is the time to scale up solutions that have proven effective, so that no one is left behind in the new digital era,” said Makhtar Diop, the World Bank’s Vice President for Infrastructure.
“Disruptive technologies are a fundamental driver of economic growth and job creation—and key to solving development challenges around the world. At IFC, we are proud to support the private sector in bringing these technologies to emerging markets, with innovations that range from portable ultrasound devices that can detect COVID-19 to medical tools that provide real-time cardiac diagnoses even in remote areas,” said Stephanie von Friedeburg, Interim Managing Director and Executive Vice President, and Chief Operating Officer at IFC.
“We are thrilled to be continuing our work with the World Bank so the world’s best and brightest innovators at CES can collaborate with the World Bank Group to enter new markets, provide solutions and aid in development,” said Karen Chupka, EVP, CES, Consumer Technology Association (CTA).
Owned and produced by CTA, CES 2021 will be an all-digital experience connecting exhibitors, customers, thought leaders and media from around the world. CES 2021 will allow participants to hear from technology innovators, see cutting-edge technologies and the latest product launches, and engage with global brands and startups from around the world. For over 50 years, CES has been the global stage for innovation, and CES 2021 will provide an engaging platform for companies large and small to launch products, build brands and form partnerships.
2020, one of three warmest years on record
The COVID-19 pandemic was not the only long-term crisis the world will remember from 2020. In terms of climate change, the year was also one of the three warmest on record, and rivalled 2016 for the top spot, the UN weather agency said on Wednesday.
“The confirmation by the World Meteorological Organization (WMO) that 2020 was one of the warmest years on record is yet another stark reminder of the relentless pace of climate change, which is destroying lives and livelihoods across our planet”, said Secretary-General António Guterres.
He pointed out that at 1.2 degrees of warming above pre-industrial levels, the world is already witnessing unprecedented weather extremes in every region and on every continent.
“We are headed for a catastrophic temperature rise of 3 to 5 degrees Celsius this century”, he warned. “Making peace with nature is the defining task of the 21st century. It must be the top priority for everyone, everywhere.”
La Niña, which began in late last year, is expected to continue into the early-middle part of 2021.
“The exceptional heat of 2020 is despite a La Niña event, which has a temporary cooling effect”, said WMO Secretary-General Prof. Petteri Taalas.
La Niña and El Niño effects on average global temperatures are typically strongest in the second year of the event.
“It is remarkable that temperatures in 2020 were virtually on a par with 2016, when we saw one of the strongest El Niño warming events on record”, he added. “This is a clear indication that the global signal from human-induced climate change is now as powerful as the force of nature”.
The extent to which the continued cooling effects of La Niña this year may temporarily diminish the overall long-term warming trend remains to be seen.
Following atypical patterns
WMO pointed to sustained heat and wildfires in Siberia, diminishing Arctic sea ice and record-breaking hurricanes in the Atlantic as being among the climate events that most stood out in 2020.
The UN weather agency also reminded that temperature is just one climate change indicator. Greenhouse gas concentrations, ocean heat content, global mean sea level, sea ice extent and extreme events are also factors.
Backed by science
WMO’s consolidated global temperature update incorporates information from five leading international sets of data.
It also uses datasets that combine millions of meteorological and marine observations, including from satellites, with models to produce a complete reanalysis of the atmosphere.
“The combination of observations with models makes it possible to estimate temperatures at any time and in any place across the globe, even in data-sparse areas such as the polar regions”, according to WMO.
Looking to the future
The Paris Agreement aims to limit global warming to well below 2°C, preferably to 1.5°C degrees, compared to pre-industrial levels.
However, the global average temperature in 2020 had already approached the lower limit of the temperature increase that the Agreement seeks to avert.
Moreover, there is at least a one-in-five chance that the average global temperature will temporarily exceed 1.5 °C by 2024, according to WMO’s Global Annual to Decadal Climate Update, led by the United Kingdom’s Met Office.
The 2021 Met Office annual global temperature forecast also suggests that next year will again be one of the earth’s hottest years.
Updating its provisional December report, WMO will issue its final publication in March, which will incorporate temperature figures, information on all leading climate indicators and selected climate impacts.
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