The Davos agenda: can ESG metrics help create a sustainable future?

That's what top business leaders discussed today at the Davos Agenda 'ESG metrics for a sustainable future' session.

Overall, the panel highlighted the large shift that had taken place when it comes to ESG and sustainable reporting.

Gillian Tett of the Financial Times noted that CEOs had touched on a "business mindset shift as companies move from tunnel vision to lateral vision on sustainable reporting."

"The idea is to get these things standardized, then investors won't be confused," Brian Moynihan, Chairman and CEO, Bank of America, said.

"This is about competitiveness," said Julie Sweet, Chair and CEO, Accenture. "Those companies who have embraced sustainability are more profitable," she added.

Alain Bejjani, Chief Executive Officer, Majid Al Futtaim Holding, added: "There is the issue of measuring, but there's actually the issue of doing. What really matters is the impact that we drive."

Started as a project to help make sense of the confusing multitude of possible ESG disclosures, the Forum's Stakeholder Capitalism Metrics lay out a universal core set of non-financial disclosures companies can use.

Now, more than 140 businesses have shown support for the Stakeholder Capitalism Metrics initiative with over 50 already including the metrics in their reporting.

Learnings from these companies have helped inform the efforts the IFRS Foundation in establishing its International Sustainability Standards Board (ISSB), which was announced at COP26.

The ISSB is focusing on creating widely accepted sustainability standard for companies, in the same way the IFRS also did for financial standards decades ago.

Frans Van Hooten, CEO at Royal Philips, highlighted that ESG alignment is important, but additional actions will also be needed to reach climate goals.

"Once we have transparency on ESG metrics, there needs to be a cost to not being sustainable, a cost to being wasteful, a cost to carbon emissions."

Source: The World Economic Forum