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World Economic Forum (WEF) – Stakeholder Capitalism Metrics

WEF Logo with backgroundTo promote alignment among existing ESG frameworks, the WEF, with Partners including Deloitte, EY, KPMG, and PwC, has drawn upon existing frameworks and identified a set of universal disclosures – the Stakeholder Capitalism Metrics. This core collection of ‘Stakeholder Capitalism Metrics’ consolidates existing metrics (from SASB, TCFD, GRI) into a more consistent option for companies to measure and report on their progress in areas of the UN’s SDGs).

 

 

Metrics

The following Themes and Metrics are defined for large companies:

  • Theme: Employment and wealth generation
    • Absolute number and rate of employment
      1. Total number and rate of new employee hires during the reporting period, by age group, gender, other indicators of diversity and region
      2. Total number and rate of employee turnover during the reporting period, by age group, gender, other indicators of diversity and region
    • Economic Contribution
      1. Direct economic value generated and distributed (EVG&D) – on an accrual basis, covering the basic components for the organization’s global operations, ideally split out by:
        • Revenue
        • Operating costs
        • Employee wages and benefits
        • Payments to providers of capital
        • Payments to government
        • Community investment
      2. Financial assistance received from the government – Total monetary value of financial assistance received by the organization from any government during the reporting period
  • Theme: Wealth creation and employment
    • Financial investment contribution disclosure
      1. Total capital expenditures (CapEx) – Depreciation supported by narrative to describe the company’s investment strategy
      2. Share buybacks + Dividend payments supported by narrative to describe the company’s strategy for returns of capital to shareholders
  • Theme: Innovation in better products and services
    • Total R&D expenses ($)
      • Total costs related to research and development
  • Theme: Community and social vitality
        • Total tax paid
          • The total global tax borne by the company, including corporate income taxes, property taxes, non-creditable VAT and other sales taxes, employer-paid payroll taxes and other taxes that constitute costs to the company, by category of taxes
        • Community investment is included within the economic contribution metric (part of EVG&D)

 

Lady Justice and globe Expanded Metrics

  • Theme: Employment and wealth generation
    • Infrastructure investments and services supported
      1. Qualitative disclosure to describe the below components:
        Extent of development of significant infrastructure investments and services supported.
      2. Current or expected impacts on communities and local economies, including positive and negative impacts where relevant.
      3. Whether these investments and services are commercial, in-kind, or pro bono engagements.
    • Significant indirect economic impacts
      1. Examples of significant identified indirect economic impacts of the organization, including positive and negative impacts
      2. Significance of the indirect economic impacts in the context of external benchmarks and stakeholder priorities (e.g. national and international standards, protocols, policy agendas)
  • Theme: Innovation in better products and services
        • Social value generated (%)
          • Percentage of revenue from products and services designed to deliver specific social benefits or to address specific sustainability challenges
        • Vitality Index
          • Percentage of gross revenue from product lines added in last three (or five) years calculated as the sales from products that have been launched in the past three (or five) years divided by total sales, supported by narrative that describes how the company innovates to address specific sustainability challenges.
  • Theme: Community and social vitality
    • Social value generated (%)
      • Percentage of revenue from products and services designed to deliver specific social benefits or to address specific sustainability challenges
    • Vitality Index
      • Percentage of gross revenue from product lines added in last three (or five) years calculated as the sales from products that have been launched in the past three (or five) years divided by total sales, supported by narrative that describes how the company innovates to address specific sustainability challenges.

Comment / observation

The metrics are intended for large companies. But they also serve as a good framework for small and medium sized companies.

Actions

The framework can be a good guide to understand the need of (large) customers and requirements they have to comply with. They will come to service providers with questions as a result of this and it is better to be prepared.

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