Did the World Economic Forum just set us all a responsibility manifesto?

The World Economic Forum’s Stakeholder Capitalism Metrics set major ESG goals for not just companies, but their executives too.

Last month, at the World Economic Forum, 61 business leaders committed to a set of Stakeholder Capitalism Metrics designed to shape responsible, sustainable, non-financial reporting across four pillars considered most critical for business, society and the planet. Signatories will report on anti-corruption measures, community investment, single-use plastics and any breaches of legal standards, amongst many other things. This is a game-raiser in terms of reputation for all.

Anything measurable puts pressure upon the senior, identifiable members of a company to live and breathe these standards, even out of the office. The ripple effect will lead to contractors and business partners also being interrogated. Private jets and extravagant parties already raise red flags, but how far could this go? We have read about wealthy business leaders breaching the spirit of Covid-19 regulations to take “vaccine holidays” in other countries, and in non-pandemic times, high profile individuals being criticised for “excessive” long haul flights. In signing up to reduce single use plastics in the workplace, for example, will executives be encouraged to switch to glass bottles from the milkman in case a full box of plastic cartons is visible outside their sprawling property on recycling day? In committing to putting measurable sustainability factors front-and-centre alongside the balance sheet, are private companies - once looked upon as profit-hungry and results-focused – by increments becoming best-behaviour leaders?

At the time the ink was drying on these voluntary pledges, they were starkly juxtaposed with reputational hurdles facing our elected democratic representatives. Politicians’ decisions, for example, to push ahead with coal power, their selection of PPE contractors and pledges to provide cheaper meat for families who cannot afford current retail prices are decisions which have had many raising process-level questions. Short-termism and the drive to provide a quick-fix is an accusation easily levelled at any politician by dint of our election cycle. Is big business leading all of us to accountable long-termism and giving us our sustainability role models?

In polarising standards, both ironically fall under increased reputational risk; big corporates will have many more potential opportunities to fall foul of the high standards they have signed up to, needing every senior player to adopt and adapt. Likewise, those not adhering to anything close to these standards in other arenas – not just politicians, but smaller enterprise and services - will surely face compounded problems of comparison and higher public expectation.

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How we protect against reputation risks and guard freedom to operate as ESG stays at the fore