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A Unified Approach to Stakeholder Capitalism

The @wef is taking stakeholder capitalism one step further with its Stakeholder Capitalism Metrics initiative. Since January, more than 100 businesses, including @Nasdaq, have shown their support for the initiative.

Two years after the Business Roundtable announced its move away from shareholder capitalism toward a commitment to all stakeholders, the World Economic Forum (WEF) is taking stakeholder capitalism one step further with its Stakeholder Capitalism Metrics initiative. Since January, more than 100 businesses, including Nasdaq, have shown their support for the initiative, with 50 companies already including metrics into their 2020-2021 reporting materials.

The Stakeholder Capitalism Metrics initiative promotes alignment among existing Environmental, Social, and Governance (ESG) frameworks and establishes a set of metrics that enhances comparability and consistency. It includes 21 core and 34 expanded metrics and disclosures focused around four themes: Principles of Governance, Planet, People and Prosperity. Through these metrics and disclosures, WEF hopes to catalyze greater cooperation and garner support towards an international system for global non-financial reporting standards connected to financial information.

By signing onto this initiative, the companies, such as Nasdaq, are committing to:

  1. Reflect the core metrics in their reporting to investors and other stakeholders (e.g., annual report, sustainability report, proxy statements, or other materials) by reporting on the metrics most relevant to their business or briefly explaining why a different approach is more appropriate 
  2. Publicly support this work and encourage their business partners to do so 
  3. Promote the further convergence of existing ESG standards, frameworks and principles to support progress towards a globally accepted solution for non-financial reporting on common ESG metrics 

“We are delighted to see so many companies joining this effort and even more so, excited to see many already implementing the metrics into their reporting,” Olivier Schwab, managing director of World Economic Forum, said in a statement. “This is the first time that we have publicly seen this breadth of data from global companies across sectors on ESG factors. The Stakeholder Capitalism Metrics are already demonstrating that consistent and comparable ESG reporting can help articulate to stakeholders the impacts of ESG commitments.”

Measuring Stakeholder Capitalism

Amid the rise of ESG-focused investing, businesses face increasing pressure to deliver on their ESG practices, such as minimizing their climate impact and engaging a diverse workforce. The Stakeholder Capitalism Metrics cover a range of metrics—from stakeholder engagement and innovation of products and services to dignity and equality and climate change—allowing businesses across industries to measure, manage and disclose their impact on these ESG factors in an effective way.

“They are largely industry agnostic and focused on metrics that will provide additional insights into every company’s ESG practices,” said Chantal Wessels, vice president and head of Global Reporting and Corporate ESG at Nasdaq.

WEF’s findings from an initial analysis of the first reports of over 50 reporting companies illustrate how companies are building skills for the future, with over $1.5 trillion invested in training. They also show that companies are innovating for better products and services with over $20 trillion related to research and development expenses and $23 trillion cumulative multi-year innovation investments.

“ESG has really become a key consideration in everything that we do, from how we engage with our suppliers to how we help position our customers to be successful, how we create a sustainable environment for our employees and how we factor it into our governance and risk practices,” said Wessels. “It’s all around us.”  

She noted that Nasdaq has already reported on the majority of these metrics through its annual Sustainability Report. By supporting the Stakeholder Capitalism Metrics initiative, she said it puts Nasdaq in an ideal position to become a “use case” for its own customers and clients.

“It enables us to provide the products and services that will help our customers be successful and ease the burden of reporting through the things that we provide, such as advisory services and technology, so organizations can more closely focus on executing various strategies rather than having to spend a lot of time on their reporting,” Wessels said.

Nasdaq has expanded its ESG offerings over the past several years, incorporating solutions such as the Nasdaq ESG Advisory Program, which helps companies analyze, assess and execute their ESG programs, and Nasdaq Sustainable Bond Network, which connects issuers of sustainable bonds with investors, empowering them to evaluate impact and make informed decisions on sustainable bonds. Also included in the suite of ESG offerings is Nasdaq OneReport, a platform that simplifies the process of ESG data capture, engagement, oversight and disclosure. OneReport is the first technology provider to have fully integrated and thoroughly cross-referenced the WEF framework, supporting ESG data management disclosure processes more effectively and efficiently. Earlier this year, Nasdaq acquired a majority stake in Puro.earth, a leading marketplace for carbon removal.

“The addition of Puro.earth to our growing suite of innovative ESG products and services extends our strategy into an increasingly important area for our 4,000+ corporate clients worldwide,” said  Nasdaq Executive Vice President and President of European Markets Bjørn Sibbern. “The partnership with Puro.earth will provide our global network of corporate clients access to a unique marketplace for carbon removal and will allow Puro.earth to scale its platform through the Nasdaq network and technology platform.”

Nasdaq’s recent investments in ESG-related solutions highlight the company’s strategic focus in this space and push for increased transparency and insights into ESG programs, which pairs with The Stakeholder Capitalism Metrics’ goal of simplifying and standardizing the ESG reporting ecosystem.

“It is important for us to have comparable datasets, which then provides additional transparency into a company’s ESG practices and strategies,” said Wessels.

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