The Big Four accounting firms have developed a set of metrics for companies to use for ESG reporting.
The metrics have been released by the World Economic Forum in conjunction with the fourth annual Sustainable Development Impact Summit.
The metrics were developed in collaboration with the Big Four firms, Deloitte, EY, KPMG and PwC, and aim to provide a common set of existing disclosures that lead toward a more coherent, comprehensive global corporate reporting system. The ESG metrics are organized around governance, planet, people and prosperity and look to align existing standards to enable companies to collectively report nonfinancial disclosures.
“This is a unique moment in history to walk the talk and to make stakeholder capitalism measurable,” said World Economic Forum founder and executive chairman Klaus Schwab. “Having companies accepting, not only to measure but also to report on, their environmental and social responsibility will represent a sea change in economic history.”
The Big Four global firms expressed support for the new metrics:
“The disruptions of 2020 have underscored the critical importance of organizations managing and reporting their impact on the economy, the environment and society, and their increasing connection to long-term enterprise value creation,” said Deloitte Global CEO Punit Renjen in a statement. “Deloitte is pleased to have led the development of the Principles of Governance pillar and collaborated on this project with so many respected organizations. We hope our work supports organizations as they move toward consistent reporting of ESG metrics and disclosures in mainstream annual reports, as ultimately, this is how the business community will make greater progress against the Sustainable Development Goals.”
“The time is now for companies to broaden their engagement with stakeholders,” said EY Global chairman and CEO Carmine Di Sibio in a statement. “The combined impacts of climate change, COVID-19 and economic inequality contribute to the urgency for businesses to embrace long-term, sustainable value creation and prioritize the needs of people and planet and the creation of broad-based economic prosperity.”
“As businesses become more acutely aware of their role in addressing societal and environmental issues, moving toward a common set of ESG-focused metrics will help ensure that we all collectively make a difference where it counts,” said Bill Thomas, global chairman and CEO of KPMG International, in a statement. “Reporting on ESG factors like carbon emissions and human rights and other key metrics will not only help inform investors while helping companies control their full corporate value, it has the power to realign capitalism for the benefit of broader society.”
“Robust non-financial reporting is a crucial element of the systemic economic reform the world needs to address issues like climate change and social inclusion, and we were pleased to be able to collaborate on this initiative and lead on the Planet pillar of this work,” said Bob Moritz, global chairman of PwC, in a statement. “Stakeholders — including investors, but also policy makers, consumers and employees — need more rounded, comparable and robust information to make decisions. Get that information flowing, align market incentives against performance on these metrics, and a better tomorrow becomes possible.”