As the UK prepares for a potential second national lockdown, it’s forgivable that some people might argue ‘now is not the time’ to address climate change and the wider ESG agenda. In my view, the challenges we’ve all faced over the last year reinforce the need for the business community to take action right now and lead from the front.
For too long, we’ve only measured the success of a company and the wider economy by financial output, often ignoring both the positive and negative impact our activities have on the people and environment around us. I’ve personally felt a combination of reassurance and unease that whilst environmental, social, and ethical issues are undoubtedly becoming more important in the boardroom, too often they can still be treated as a bolt-on or just part of the company’s PR programme.
But things are changing, and changing fast. Alongside the other Big4 professional services firms, KPMG has been working in collaboration with the International Business Council of the World Economic Forum on a pioneering piece of work that could result in lasting change for every one of us in the corporate world. We’ve created a series of proposed ESG metrics and reporting disclosures that can start to be adopted by businesses TODAY. The action’s been taken after research revealed a staggering 90% of corporate leaders agree that a universally adopted, industry-standard metrics system would be beneficial to the financial sector and wider global economy. In short, the business world wants to measure and understand its ESG impact, and to do something about it. But to date that ambition has been held back by the plethora of ESG measures and tools which make it impossible to compare like with like in such non-financial information.
The response from corporate leadership to the Coronavirus pandemic has, in many ways, demonstrated the shift in approach and thinking in big business. Leaders have adopted people-first approaches, supporting employees to embrace working from home and ensuring greater collaboration and mental health support is available in a period of challenge. They’re now turning their attention to reskilling as the shape and size of their workforce necessarily changes post COVID. So, significant steps in the right direction and I’m confident the trend is moving towards a world where companies take a holistic approach to growth – asking how their products and services impact all stakeholders and society.
The World Economic Forum’s main recommendations focused on ‘pillars’ – Principles of Governance, Planet, People and Prosperity. It’s a simple, transparent model to support businesses grappling with increasingly complex issues. Over the coming months and years, building back our economy will present huge challenges. It’s incumbent upon us all to work together to create a more transparent, sustainable growth strategy that addresses the world’s problems and offers solutions and benefits for all.