Five years ago, Jane-Gleeson White authored the whimsically titled book Six Capitals, or Can Accountants Save the Planet? Its sub-title was Rethinking Capitalism for the Twenty-first Century.
For obvious reasons, the book proved to be quite popular with the accounting crowd. And during the past five years, it also proved to be prescient about the global community’s flourishing debate regarding the impact of capitalism on social inequality, economic instability, and environmental degradation.
Last month, the World Economic Forum worked in collaboration with public accounting’s “Big Four” global firms to produce a White Paper entitled Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation. Under normal circumstances, one might expect such a White Paper to be filled with general platitudes and vague goals about moving “towards” more concrete standards over the long term.
Not this time. The White Paper is stunningly specific about a major obstacle that impedes our attempts to save the planet. Indeed, it presents a detailed solution.
What is the obstacle? It is the lack of a universal consensus around a single set of sustainability standards. The Paper creates such a set by synthesizing the frameworks and standards of five different voluntary bodies, while referring to the Sustainable Development Goals of a sixth body, the United Nations. Drawing upon these sources, the Paper defines 55 universal metrics and disclosures that can be utilized by all global organizations.
These are not 55 vague definitions. They are detailed technical standards that are designed to be measured within organizations and then reported to the public. In the White Paper, the World Economic Forum and the “Big Four” public accounting firms assert that:
“By reporting on these recommended metrics in its mainstream report – and integrating them into governance, business strategy and performance management —a company demonstrates to its shareholders and stakeholders alike that it diligently weighs all pertinent risks and opportunities in running its business.
But beyond this, those corporations that align their goals to the long-term goals of society … are the most likely to create long-term sustainable value, while driving positive outcomes for business, the economy, society and the planet. This is the true definition of stakeholder capitalism.”